L-R Sujani Perera, Vice President at NDB Investment Bank; Kaushini Laksumanage, Chief Operating Officer at NDB Investment Bank; Eshani Thenuwara, Senior Vice President at NDB Investment Bank
Sri Lanka’s corporate sector is emerging from crisis into a landscape of tight liquidity, cautious investors, and the need for more resilient funding models. Heavy reliance on short-term bank borrowing exposed structural weaknesses, forcing companies to rethink capital raising and risk management. NDB Investment Bank focuses on meeting this need by supporting corporates in strengthening balance sheets, accessing capital markets, and obtaining sustainable long-term funding.
Echelon sat down with Kaushini Laksumanage, Chief Operating Officer; Eshani Thenuwara, Senior Vice President; and Sujani Perera, Vice President, at NDB Investment Bank, to understand how Sri Lanka’s fundraising landscape is evolving and what it will take to rebuild investor confidence and corporate resilience.
Looking ahead, how will Sri Lankan companies balance borrowing from banks versus raising money through capital markets over the next five years, especially after the recent economic crisis?
Kaushini Laksumanage: Going forward, Sri Lankan corporates will likely pursue a more diversified funding approach instead of focusing on bank borrowings. The recent economic crisis has highlighted the vulnerability of a funding strategy that is too dependent on short-term bank loans, especially in an environment of liquidity squeezes and higher interest rates.
The capital market provides longer tenors, a diversified investor base, and the ability to structure instruments that match a company’s cash flow cycles. We anticipate that corporates will increasingly use the listed bond market to finance their medium- to long-term funding requirements, as well as other structured products such as thematic instruments like green or sustainability-linked bonds.
Of course, banks will remain an essential funding source, especially for working capital and relationship-based lending. The future lies in a portfolio approach, where banks are used for flexibility and capital markets for strategic, longer-term funding needs. This diversification will strengthen corporate balance sheets and improve resilience.
In today’s market, what matters most for a successful fundraising deal? Is it pricing, investor confidence, deal structure, or the financial strength of the company?
Eshani Thenuwara: In the current market, the following four elements must be properly aligned for successful fundraising: investor confidence, financial strength, deal structure, and pricing.
Investor confidence is the starting point. In the post-crisis era, investors attach considerable importance to governance standards, transparency, and management credibility. Even well-priced deals struggle if trust is lacking.
Financial strength is always important, but equally important is the company’s ability to communicate its strategy, whether it is growth, refinancing, or stability. Investors seek clarity and consistency.
Deal structure has become increasingly important. Deals with appropriate tenors, credit enhancements, security arrangements, and covenant structures can significantly increase investor participation. A properly structured transaction is a far more effective risk reducer than an aggressively priced one.
Pricing, although important, is ultimately a measure of demand. In the current market, confidence and structure matter more than marginal pricing advantages. When investors are confident in the credit story, pricing becomes more competitive.
What are Sri Lankan companies prioritising most at the moment—growth, consolidation, or financial stability?
Sujani Perera: Currently, financial stability is the immediate concern for most Sri Lankan firms. Many companies are focusing on strengthening their balance sheets, improving liquidity, and refinancing more expensive or shorter-term borrowings that were accumulated during tougher times.
Consolidation is also underway, with efforts to optimise operations, restructure, and enhance efficiency. Companies are more prudent in their capital allocation decisions and are cautious about over-leveraging.
However, we are now seeing selective growth initiatives, especially in export-focused industries, renewable energy, infrastructure, and technology.
In summary, stability is the immediate priority, consolidation is ongoing, and growth is being pursued strategically where fundamentals justify it.
What key reforms or developments are needed for Sri Lanka’s capital markets to attract more local and foreign investment, and how important is diverse leadership, including greater female representation, in building that confidence?
Kaushini: For Sri Lanka’s capital markets to attract more local and foreign investment, several key developments are required. Firstly, macroeconomic stability and consistency are essential for restoring investor confidence. Foreign investors, in particular, value predictability.
Secondly, further improvements in the efficiency and transparency of regulatory processes will help boost market credibility. Simplified procedures and higher disclosure standards can make raising capital more attractive.
Thirdly, a more developed domestic institutional investor base and a broader range of products, such as thematic and structured instruments, will help improve market liquidity and diversification.
Diversity, including more women in leadership, also has a significant role to play in improving market confidence. Diversity enhances governance standards, promotes well-rounded decision-making, and sends a positive signal about institutional maturity. For emerging markets, visible inclusivity also reflects alignment with global best practices, which international investors value highly.
In an increasingly competitive advisory landscape, what differentiates NDB Investment Bank’s approach to originating and executing complex transactions?
Eshani: At NDB Investment Bank, our edge lies in innovation in structuring. We have consistently introduced new products to the Sri Lankan capital market, expanding corporate funding options. In addition, our integrated execution capabilities enable us to provide clients with end-to-end advisory services, from origination and structuring to placement and post-issuance services.
Sujani: We also maintain strong relationships with clients. Our long-term engagement with investors allows us to accurately gauge market sentiment and position transactions accordingly. Most importantly, we view transactions as long-term relationships rather than one-off engagements. Our focus is not merely on closing a deal, but on sustainably strengthening clients’ capital structures while delivering meaningful, long-term value.