About
Today March 11, 2011 Union Bank of Colombo Limited announces to CSE the share allotment for their recent Initial Public offerings.
The Union Bank of Colombo Limited announce the following allotment categories
Category A – Employees of UBC
| No of Applications | No of shares applied | Basis of Allotment |
| 353 | 1,886,700 | based on the Number of years in service and the grade of employment at UBC |
Category B – Customers of UBC
| Category | No of Applications | No of shares applied | Basis of Allotment |
| Application up to and inclusive of 2,000 shares | 482 | 569,900 | 100% of shares Applied |
| Applications over 2,000 shares | 709 | 482,450,900 | 2,000 shares, plus a proportionate number of share on the above of 2,000 shares (rounded to the nearest 100) |
| 1,191 | 483,020,800 |
The Applicant who application over 2000 shares will allot the shares proportion would be based on the number shares applied and the period of the applicant being a customer of Union Bank of Colombo. The both will be consider for 50:50.
The above remaining shares will be allotted to 100 shares each for the Applicant who apply for 2,250,000 shares and above, and had been customer had been customer of UBC prior to September 30, 2003.
Category C – other Investors
| Category | No of Applications | No of shares applied | Basis of Allotment |
| Application up to and inclusive of 5,000 shares | 57,614 | 51,953,300 | 100 Shares |
| Applications over 5,000 shares | 5,503 | 4,637,824,200 | 200 shares, plus 0.1094% of the shares Applied over and above 5,000 shares rounded to the nearest 100 shares |
| 63,117 | 4,689,777,500 |
My view
The Union bank faces the huge stress to allot the shares with complication of these categories and these much of oversubscription. But mostly the other investor categories are fairly affect because of the
| Category | Number of shares allotted as per Prospectus | Number of shares applied | Number of times over subscribed | |
| Category A | 1,500,000 | 1,886,700 | 1.2578 | |
| Category B | 2,250,000 | 483,020,800 | 214.6759 | |
| Category c | 11,250,000 | 4,689,777,500 | 416.8691 | |
| Total | 15,000,000 | 5,174,685,000 | 344.9790 | |
As I see from the Application, I feel Union bank of Colombo Limited Over subscribe by the 344.9790 times.
This may be the historical event in the Colombo Stock exchange to over subscribe as a 345 times.
Mostly the other investors are subscribing more than the employees or the customers. By see the above ratio I doubt that the Employee of Union bank of Colombo limited may feels it’s not a good investment or they don’t like to be part in the IPO process. That’s may be the reason for not subscribing UBC IPO.
As usual it’s used to over subscribe by the other investors; who are mostly expecting to gain capital benefits in the initial days and long term gains.
http://synergyy.com/2011/02/union-bank-of-colombo-limited-ipo/
http://synergyy.com/2011/02/union-bank-ipo-oversubscribed-by-225-times/
http://www.cse.lk/cmt/upload_cse_announcements/6131299826631_.pdf
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