The Sunday Leader

AINV Issues Rs.133.3Mn Worth Of Shares To The Public

By Sadhana Senanayake

Rs. 400 million worth of Initial Public Offer and listing of the shares of Adam Investments Limited (AINV) on the Diri Savi Board of the Colombo Stock Exchange were announced recently. The IPO opens on 19th May 2014. Adam Investments Limited received approval to issue 133.3 million shares at Rs. 3 each.

Adam Investments Ltd is a newly formed investment company which looks at investment, revival and management of a growing number of subsidiary companies as its core business.

The IPO offers the company greater access to financial markets to form a presence and create an impact in the sectors in which they operate whilst broad basing the shareholding.

Adam Investments Ltd has equity investments in Orient Garments Plc where they hold 39.8%,9% in Ceylon & Foreign Trades Plc, 10% inPC House Holdings Plc. They also have substantial shares of private limited liability companies , namely43% in Network Communications (Pvt) Ltd,47% in Adam Metals (Pvt) Ltd, 31% inAdam Apparels (Pvt) Ltd. As well as two 100% owned subsidiaries, Adam Automobiles  (Pvt) Ltd and Adam Air Conditions (Pvt) Ltd.

All of the above mentioned companies pre-date the formation of Adam Investments Ltd., Some of them were businesses established and operating for over 40 years, others are already publicly listed companies. Adam Investments Ltd makes strategic investments in companies to revive and revitalize them through sound management and frugal fiscal practices.

While all the companies within the Adam Investment umbrella have seen positive development, the case of Orient Garments Plc demands particular mention.

Adam Investments Ltd., gained board control of Orient Garments Plc on 8th January 2014. In the ensuing months of the quarter, Orient Garments Plc saw a remarkable turnaround recording a profit of Rs. 113,264,820 in the fourth quarter 2013/14, up 864% from Rs. 13,095,907 a year earlier. The unaudited statements uploaded to the Colombo Stock Exchange’s website on 30 April 2014 show the details.

More importantly, it stopped and reversed a trend of losses over the last few quarters of 2013/14 and has now set the company upon a steady course towards greater efficiency and effectiveness which are reflected in the bottom line.

Since the acquisition, AIL has expanded its in-house designed apparel exports share to 20% and hopes to increase it to 40%. It has scaled up operations with the number of production lines increased from 29 to 57.

The market also recognized the positive impact Adam Investments Ltd., has had and boosted the price of an Orient Garments Plc. share to approximately Rs. 15, nearly 100% more than Adam Investment Ltd paid for its 39.8% share.

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