CSE becomes flexible to list technology stocks

The Colombo Stock Exchange has indicated to the Federation of Information Technology Industry Sri Lanka (FITIS). Following both the Main Board and (Diri Savi) Board have new alternative rules for listing.

For the mainboard in place of having positive net assets for the last two financial years and net profit after tax for 3 consecutive financial years or aggregate net profit after tax for three consecutive financial years firms will be able to list based on market capitalization and revenue.

Firms looking to list on the mainboard will require market capitalization over Rs 5 billion and aggregate revenue of Rs 3 billion for three financial years.

Firms looking to list on the Diri Savi board will require market capitalization of Rs 2 billion and aggregate revenue of Rs 350 million.

Firms looking to list on both boards will require an independent auditors report not containing an emphasis of matter on going concern.

The indication by the CSE was made on 26 August on a webinar organized by FITIS in partnership with ICTA.

CSE CEO Rajeeva Bandaranaike said the IT Industry in Sri Lanka has seen a 120 percent rate of growth in Sri Lanka over the last 5 years. The sector is the 4th largest export revenue earner and plans to become a US$ 5 billion industry in the future. The sector currently employs 200,000 people directly and is home to 1000 start-ups. Bandaranaike saw equity issuances as a potential form of financing to allows firms to retire more expensive debt obligations.

The CSE has decided to become more flexible on its requirements on allotment and prospectus disclosure to encourage new listings. Firms may also use the exchange to list and add value to their share option schemes. (DP)

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