Dialog-Airtel Lanka merger comes centre stage

By Hiran H. Senewiratne

Sri Lanka’s premier mobile phone company, Dialog Axiata, will issue 952 million shares by way of a share swap to Bharti Airtel to acquire the latter organization. The deal was finalized yesterday, CSE market analysts said.

Bharti Airtel and Dialog Axiata entered into a Binding Agreement to merge their operations in May 2023. Dialog is the largest telecom service provider in Sri Lanka with more than 17 million subscribers as of 2021, representing around 51 percent of the market. Airtel Lanka has about 5 million subscribers. The 952 million Dialog shares amount to 10.4 percent of the total shares issued by the company.

However, the stock market was sluggish because profit takings came to the fore due to continued uncertainty in the external debt restructuring exercise. Both indices moved downwards. The All Share Price Index went down by 33.1 points, while the S and P SL20 declined by 8.81 points. Turnover stood at Rs 2.22 billion with 3 crossings.

Those crossings were reported in National Developments Bank, where 1.26 million shares, each worth Rs 72, crossed to the tune of Rs 90.6 million, DFCC 300,000 shares crossed for Rs 23.4 million; its shares traded at Rs 78 and Central Finance 205,000 shares crossed for Rs 22.5 million; its shares traded at Rs 110.

In the retail market top seven companies that mainly contributed to the turnover were; Capital Alliance Rs 481 million (7.2 million share traded), Lanka Milk Food Rs 318 million (10.7 million shares traded), Hemas Holdings Rs 100 million (1.2 million shares traded), JKH Rs 87.4 million (429,000 shares traded), Commercial Bank Rs 75 million (708,000 shares traded), HNB Rs 66 million (343,000 shares traded) and Sampath Bank Rs 64.3 million (827,000 shares traded). During the day 71 million share volumes changed hands in 20125 transactions.

It is said high net worth and institutional investor participation was noted in Hatton National Bank, Dialog Axiata and Teejay Lanka. Mixed interest was observed in Lanka IOC, Ambeon Capital and Capital Alliance, while retail interest was noted in Browns Investments, SMB Leasing and LOLC Finance.

The Banking sector was the top contributor to the market turnover (due to HNB), while the sector index gained 0.30 percent. The share price of Hatton National Bank decreased.

The Diversified Financials sector was the second highest contributor to the market turnover (due to Capital Alliance), while the sector index increased by 0.90 percent. The share price of Capital Alliance appreciated by Rs. 4.40 to Rs. 63.40.

Yesterday rupee opened at Rs 301.00/302.05 to the US dollar in the spot forex market from 301.00/302.05 previous day, dealers said. Bond yields were steady. A bond maturing on 15.12.2026 was quoted at 11.32/34 percent from 11.30/35 percent. A bond maturing on 15.12.2028 was quoted stable at 12.10/20 percent.