Janashakthi eyes General Insurance return, NBFI buy

JXG, the parent company of the Janashakthi Group, plans to re-enter the general insurance business by acquiring the general insurance arm of an existing company. It is also plans to acquire a finance company to strengthen its non-bank financial institutions (NBFIs) arm, Janashakthi Finance, JXG CEO/MD Ramesh Schaffter told Sunday Observer Business on the sidelines of the Group’s Initial Public Offering (IPO) press conference last week. He said the group’s dedicated Mergers And Acquisitions (M&A) division is in discussions with several interested parties and has already entered into non-disclosure agreements with them. “We are actively pursuing M&A while maintaining our long-standing strategy of balancing organic and inorganic growth,” Schaffter said. The Janashakthi Group (JXG) last week announced the launch of its IPO of Rs 5 billion. The IPO is due to open on April 9. First Capital Advisory Services (Pvt) Ltd is the Manager and Financial Advisor to the issue.

JXG is offering 500 million ordinary shares at Rs 10 per share, representing a 21.74% post-IPO stake. An independent valuation by Deloitte Sri Lanka places JXG’s per-share value at Rs 15.92, positioning the IPO at a 37.18% discount to the valuation.

JXG said the largest portion of IPO proceeds, amounting to Rs 3.5 billion, will be directed towards expanding its local financial services operations, including general insurance, microfinance, and other non-bank financial services. This expansion is expected to take place via acquisitions, consolidation, and new business ventures, subject to regulatory approvals.

A further Rs 500 million has been earmarked for regional expansion into frontier and emerging markets in East and Southern Africa. The group plans to extend its existing verticals — investment banking, non-bank financial services, and insurance — into these regions to diversify revenue streams beyond Sri Lanka.

The remaining Rs 1 billion will be used for debt optimisation, including the partial settlement of commercial paper obligations, aimed at improving the group’s capital structure and financial flexibility.

On financial management, Schaffter stressed the importance of aligning the group’s debt profile with its long-term investment strategy.

The company has already shifted a significant portion of its borrowings from short-term maturities of less than one year to longer tenures of three to five years, with plans to secure even longer-term financing.

“We aim to match debt maturity with underlying investments and reduce exposure to short-term instruments such as commercial paper, which could pose refinancing risks,” he saied, adding that efforts are also under way to stabilise interest costs through fixed-rate borrowings.

Schaffter said subsidiaries operating in these sectors would receive financial backing for potential transactions, while the group’s life insurance arm remains well capitalised, holding more than double the regulatory requirement to support future growth.

“We are exploring overseas expansion opportunities, including a previously considered entry into Bangladesh’s life insurance market through a potential partnership.”

However, Schaffter said that such plans remain subject to evolving regulatory conditions, including restrictions on capital outflows.

“Opportunities come to our table every day, but it is premature to specify exactly how funds will be deployed overseas,” he said.

He said the group’s new funding strategy involves issuing new shares, with no divestment of existing holdings. “All proceeds go into the company to fuel expansion,” he added. The JXG Group consists of three listed firms: First Capital Holdings PLC, Janashakthi Insurance PLC, and Janashakthi Finance PLC, formerly known as Orient Finance.

JXG Deputy CEO Dilshan Wirasekara said that the IPO has already attracted interest from local and foreign family offices and expressed hope that it will be oversubscribed on the opening day, without being impacted by the ongoing Middle Eastern crisis, as there is around Rs 300 billion in excess liquidity in the banking sector.

The group reported total assets of approximately Rs 194 billion, reflecting its scale and continued expansion. At the company level, JXG posted a net profit of around Rs 1.9 billion for the first half of FY2026, underlining consistent profitability and strong underlying performance.

Source - Sunday Observer