Equity Analysis /
Sri Lanka

National Development Bank: NDB: Shoring up capital – rights issue announced; reiterate Sell

    Rohit Kumar
    Rohit Kumar

    Global Financials/Thematics

    Tellimer Research
    21 June 2018
    Published byTellimer Research
    NDB has announced a 1 for 3 rights issue at a price of LKR105/share, potentially issuing 59mn new shares and raising LKR6.2bn additional capital (18% of existing capital base). The purpose of the rights issue is to strengthen the equity base and finance growth in the loan portfolio. The move was expected as the management had indicated on various occasions that it would raise capital in the near future. However, the size of the issue is larger than our expectation of cLKR4bn-5bn.