Issuer Forum Convened to Discuss the Benefits of State-Owned-Enterprise Participation in Capital Markets

The Securities and Exchange Commission of Sri Lanka (SEC) and the Colombo Stock Exchange (CSE) recently hosted a forum recently themed “Defining the Future of State-Owned Enterprises through Capital Market Integration” to a gathering of state-owned-enterprises (SOEs) in Colombo.

The forum, initiated with the support of Dr. Harshana Suriyapperuma, Secretary to the Treasury, Ministry of Finance, Planning & Economic Development, is part of a broader initiative to engage and encourage SOEs to use the capital market as a source of funding to catalyse mid-to-long term business and organizational growth.

Over 45 SOEs had the opportunity to engage with senior government officials, veterans from SOEs and capital market experts to discuss capital raising pathways through the CSE.

The forum featured in-depth presentations by Snr. Prof. D.B.P.H. Dissabandara, Chairman of the SEC and by Mrs. Nilupa Perera, Chief Regulatory Officer of CSE, as both discussed how SOEs can navigate capital market landscape, perceived benefits beyond raising capital, the trust built through transparency, and the products, both debt and equity, that can be offered as means of raising capital.

The presentations were followed by a panel discussion and Q&A session with Snr. Prof. D.B.P.H. Dissabandara, Chairman of the SEC; Mr. Gihan Cooray, Deputy Chairman and Group Finance Director of John Keells Holdings PLC, Mr. Senaka Kakiriwaragodage, CEO of NDB Capital Holdings Ltd; Mrs. Nilupa Perera, Chief Regulatory Officer of the CSE; and Mr. Rihaan Shakoor, Assistant General Manager of Investments at the Bank of Ceylon; with Mr. Rajeeva Bandaranaike, CEO CSE, moderating the discussion.

The combination of perspectives from policy advisors, SOE listed companies, investment banks and capital market regulators and facilitators equipped the forums participants with a comprehensive overview of the Sri Lankan capital market and how SOEs could utilize it to diversify means of funding to enjoy a robust financial infrastructure and streamline and raise the quality of services provided.

Members of the panel discussed the possibilities of enhancing participation of the general public of SOEs, how listing would require the state to retain control, the ways SOEs could explore Employee Stock Ownership Plan (ESOP) schemes, the need for regular financial reporting and transparency to build investor trust for a successful SOE IPO, and the importance of understanding the underlying purpose of SOEs to provide efficient services and how to ensure that capital market integration aligns with that purpose.

During his opening presentation, Chairman of the SEC Snr. Prof. Dissabandara, remarked upon the opportunities that capital markets offers SOEs, stating “State-Owned Enterprises play a vital economic and social role in Sri Lanka and remain central to the country’s long-term growth. However, many SOEs face financial constraints, governance gaps, and heavy reliance on Treasury funding.

The capital market can be a strong partner in addressing these challenges by providing alternative avenues for financing while improving transparency, accountability, and operational efficiency.

Listing SOEs would help reduce the burden on public finances, attract strategic and institutional investors, deepen market liquidity, and support the capital formation needed for Sri Lanka’s economic transformation.”

Chairman of the CSE Mr. Dimuthu Abeyesekera, remarked upon how capital market integration of SOEs offers greater public participation, stating:

“International experience shows that when public enterprises enter the capital market, it often encourages greater transparency, clear performance benchmarks, and stronger accountability.

Another important aspect is the opportunity for broader public participation in national enterprises.

Through well designed market structures, citizens can become stakeholders in institutions that contribute directly to the country’s economic growth.

Employees can be included further through structured participation schemes that align their long-term interests with the success of the organization.

When employees feel they are a part of the institution’s vision, it often leads to stronger commitment and better performance.”

CRO of the CSE, Mrs. Nilupa Perera, in her main presentation, discussed the Catalyst Board, which was established as a more flexible platform to encourage State-Owned Enterprises (SOEs) to participate in the capital market.

She explained that the Catalyst Board was introduced as an entry point for SOEs, providing a more relaxed regulatory framework to facilitate their gradual integration into the capital market.

Last year also saw 25 listings on the Exchange including 6 newly listed companies, to raise capital to fund rapid expansion, and the issuances of new instruments for the first time in the country including Blue Bonds, Green Bonds, Social Bonds, High Yield Sustainable Bonds and Shariah Compliant Debt Securities.

Between 2020 and the end of 2025, listed companies were able to raise LKR 560.58 Bn by way of debt and equity IPOs and rights issues.

Listed companies have been able to tap into a rapidly growing investor base as the number of CDS account holders crossed the 1m threshold recently.