The success over the years stems from its relentless commitment to exceeding client expectations by comprehending their complex capital needs and the corresponding structural requirements.
With a distinguished track record spanning over 25 years, NDBIB is the leading investment bank in Sri Lanka specializing in a comprehensive suite of services. These services encompass Initial Public Offerings, Mergers and Acquisitions, Private Placements, Corporate Finance Advisory Services, Debenture Issues, Syndicate Loans, Debt Restructuring etc. Darshan Perera, Director and Chief Executive of NDBIB, Kaushini Laksumanage, Chief Operating Officer, and Saminda Weerasinghe, Head of Corporate Advisory, reflect on the economic landscape and evolving opportunities in the capital market in the immediate future.

What is your reading of the recent economic developments?

We’re optimistic about the recent economic shifts in Sri Lanka, particularly the progress seen in the Domestic Debt Optimization (DDO) initiatives and the external creditor plan. The monetary measures taken by the Central Bank of Sri Lanka (CBSL) and the fiscal policies introduced by the Government add to this optimism. We are hopeful that these steps will lead to a favourable review from the International Monetary Fund (IMF), further aligning the country’s progress with the IMF’s guidelines.

On the monetary front, the lowered interest rates indicate reduced risk perceptions, which are likely to stimulate heightened activity in the capital market. We’ve already observed an uptick in leads and inquiries directed our way, and we anticipate that this increased interest will translate into mandates and successfully executed transactions.

We commend the Central Bank’s robust measures to drive down lending rates through commercial banks. Given these positive economic indicators, coupled with expectations of a stabilizing currency, we also foresee a revival of interest from foreign investors.

Can you share insights into your outlook for the capital market and the factors influencing its trajectory? How would you describe the emerging capital market opportunity?

We’re observing promising opportunities in the current market landscape, particularly in the realm of debt restructuring coupled with corporate finance (CF) requirements. The easing of interest rates presents a timely chance for businesses to bring in revival strategies that have been financially strained by previous high-interest environments. These businesses are likely to seek refinancing options that offer a lower cost of debt, along with structured payment schemes. Such measures would not only alleviate cash flow pressures but also improve business margins and bolster overall valuations.

Additionally, the relaxed interest rates pave the way for an uptick in corporate debentures, specifically those related to BASEL 3 Tier 2 capital raising from banks. On the equities side, there’s growing interest in capital raising via Initial Public Offerings (IPOs).

We’re currently engaged in a few IPOs for this year and anticipate even more activity in the year to come. As liquidity conditions improve and the cost of capital reduces, we expect to see an enhancement in valuations, which in turn will invigorate the M&A landscape.

What are your plans for growth and expansion into overseas markets?

NDBIB boasts a formidable presence in the Maldives, where we have the specialized domain expertise to execute capital-raising activities of any scale, both in equity and debt. We hold the unique distinction of being the only Sri Lankan investment bank to execute two international IPOs in the Maldives.

In Bangladesh, our Sri Lankan team is jointly engaged in the equity space with our Bangladesh team and is currently working on several M&A transactions and fundraisings.

We completed a transaction in Kenya this year, raising $14 million for Hela Apparels through Norfund. We are also pursuing promising leads in multiple African countries.

Recognizing the strategic importance of South Asian markets, with a special focus towards India, we have made a conscious decision to intensify our efforts in seeking distribution capabilities in the region. We intend to invest significant effort in expanding our international connections and converting them into meaningful transactions. To accomplish this, our internal strategy emphasizes expanding our foreign deal pipeline, aiming to make it surpass our local contributions. We are taking a targeted approach, focusing specifically on scalable business segments such as Exports, ICT, Agriculture and related industries, FMCG, and Energy.

Our goal is to identify clients within these sectors and connect them with specialized distribution partners. We plan to leverage both our network and that of our ultimate parent NDB Bank to gain traction in these areas. Additionally, we are excited to introduce a timely advisory service line next year, developed in collaboration with one of our international partners. We anticipate that this new offering will further solidify our position as the preferred financial advisor to our clients.