Cable Solutions Limited’s Investor Forum Concludes Successfully Ahead of IPO on the 23rd of July
Subsequent to the announcement of its initial public offering (IPO) recently, Cable Solutions Limited (CSLK) – one of Sri Lanka’s leading specialised integrated cable manufacturers – successfully concluded its Investor Forum on the 9th of July 2024.
Held as a virtual event, with participants from across the world, the Investor Forum was attended by industry experts, media representatives, and diverse groups of investors – including both local and foreigninstitutional and individual investors.
The event provided an ideal platform for the company to highlight its robust growth trajectory and commitment to technological advancement, whilst providing a comprehensive overview of its value proposition and strategic direction.
The Investor Forum also provided a valuable opportunity for the participants to engage directly with the company’s leadership team, gaining insights into future growth avenues and CSLK’s vision of becoming one of the top 10 cable manufacturers for the electronics industry in Asia and Europe by 2028.
Accordingly, applications for the IPO of CSLK are currently being accepted, providing investors with a compelling value proposition. Meanwhile, the issue, which is being exclusively managed and advised by Asia Securities (Private) Limited, will open on the 23rd of July 2024.
At the offer price of LKR 7.50 per share, and based on FY25 forecasted revenue, the IPO is priced at a P/E multiple of 8-9x, as forecasted by KPMG and the company budget. This valuation is at a significant discount of 27-51% based on DCF and market multiple valuations, against regional peers, as per the independent valuation report by KPMG.
With revenues exceeding LKR 3.3 billion in FY23 and exports accounting for 94% of total revenue, CSLK has a proven track record of performance. The company exports to 13 countries, including major economies like the USA, UK, Germany, and India, demonstrating its resilience and adaptability in the global market. As a result, it provides investors with a lucrative opportunity for portfolio diversification, together with considerable insulation against exchange rate risks, and domestic market volatility.
The IPO will see a total of 80,786,600 ordinary voting shares being offered to the public. This will include an offer for subscription of 14,666,600 new shares, and an offer for sale of 66,120,000 existing shares by some non-majority shareholders.
Cable Solutions Limited expects to raise a total of LKR 109,999,500/- through the offer for subscription, and these funds will be allocated towards new machinery and production line development (81.8%) and working capital (18.2%).The sale of existing shares of the company, by some of its non-majority shareholders, will be subject to the offer for subscription being fully subscribed.
CSLK has carved a niche for itself in the cable manufacturing industry with its ability to produce highly customised cables for specialised applications. With a strong focus on R&D and a track record of successful market expansions, CSLK is poised for continued growth. Over the years, CSLK has strategically invested in expanding its operational capacities, including acquiring advanced machinery and expanding its harness capabilities. The company’s diversification into high-growth sectors such as automotive, aerospace, electronics, and renewable energy, coupled with its expanding market reach across the USA, Europe, and India, positions it for significant future growth.
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