The Hemas Power Initial Public Offering (IPO) for 31.3 million ordinary shares to raise Rs. 600 million or more was oversubscribed at Rs. 20 per share by 10.30 AM yesterday, the opening day of the issue.

"All I can say for now is that the IPO was oversubscribed by about 10.30 AM. We would have to keep the offer open till around 4.30 PM," Hemas Power Managing Director, Kishan Nanayakkara, said last afternoon.

"We would decide later as to how the shares would be allotted, maybe within five or seven market days according to the prospectus. There will be no preferential share allotments," he told the Island Financial Review.

According to a Colombo Stock Exchange filing, SSP Corporate Services, secretaries to this issue, said the IPO was oversubscribed at an issue price of Rs. 20 per share.

The IPO is expected to raise capital for Hemas Power’s 1.18 MW Magal Ganga Small Hydro Plant, currently under construction, intending to expand its capacity to 2.4 MW.

The IPO is also expected to fund the acquisition and development of other power generation projects, especially in non-conventional renewable energy generation from wind and bio-mass.

The share offer price was to be determined through a book building process where the market is left to determine the price of a share within a price range of Rs. 17, Rs. 18, Rs. 19 and Rs. 20.

The power generation sector is expected to be a major growth sector in parallel to the country’s post-war economic growth prospects. The demand for electricity is expected to grow by 8.5 percent by 2022, but this estimate was before the war ended.

At the time of writing the offer was still open.

Hemas Power is a fully owned subsidiary of Hemas Holdings PLC, which was listed in the Colombo Stock Exchange in September six years ago.