Inside Financial Markets

One of Pakistan’s leading pharmaceutical company, all set to be listed in PSX

One of Pakistan’s leading pharmaceutical company, AGP Limited all set to be listed in PSX

AGP Limited is part of OBS Group, Pakistan’s 8th Largest pharmaceutical group. Book Building of AGP Limited would be held on 7th and 8th of February 2018.

The Offer:

OBS Pakistan (Private) Limited (“OBSPL”) and Muller & Phipps (Pakistan) (Private) Limited (“M&P”), major shareholders of AGP Limited (“AGPL”) intend to offer 35 million shares to the public from their total shareholding in the company. The Transaction represents 12.50% of the total Paid-up Capital of AGPL.

The Floor price has been set at PKR 80/- translating to an attractive P/E multiple of 18.2x

  • Book Building Portion – 35,000,000* Shares at a Floor Price of PKR 80.00/share
  • General Public Portion – 8,750,000 Shares at the Strike Price determined via the Book Building


*The Bidders shall be allowed to place Bids for hundred percent (100%) of the Offer size and the Strike Price shall be the price at which the hundred percent (100%) of the Offer is subscribed. However, 75% would initially be allotted while the remaining shares would be allotted in case the public offer is undersubscribed.

.The Company

The Company consists to two plants that were previously two companies i.e. AGP (Pvt.) Limited and AGP Healthcare (Pvt.) Limited. These companies were acquired by a consortium led by OBS Pakistan (Pvt.) Limited through a Special Purpose Vehicle (“SPV”). Post-acquisition, the two companies were merged into the SPV with the surviving company being named AGP Limited.

AGPL has grown steadily through manufacturing and marketing products under licensing arrangements with many companies of international repute and simultaneously through manufacturing and marketing its own brands.

The Company is one of the largest pharmaceutical companies in Pakistan, providing a broad range of pharmaceutical services. AGPL specializes in manufacturing, marketing and sales of pharmaceutical & healthcare products licensed from reputable European and American multinational pharmaceutical companies in the domestic and export market. The delivery of AGPL’s products, across the country, is managed by Muller & Phipps Pakistan (Private) Limited, with one of the largest and state of art distribution set- ups in Pakistan.

AGPL has a strong foothold across the country through a comprehensive access to 32,400 pharmacies in Pakistan through Muller & Phipps Pakistan (Private) Limited (“M&P”). M&P is the largest Pharmaceutical distributor in Pakistan with information systems, warehousing and network outreach, that is next to none.

Product Portfolio

AGPL offers a total of 54 drugs. It launched 5 new products in 2016 and 8 products in 2017. A robust allopathic and nutraceutical product pipeline is aggressively pursued in order to ensure sustained revenue growth. AGPL has a long history of strategic alliances with international pharmaceuticals like OM (Vifor) Pharma, UCB, Osmopharm, GSK, Dr. Kade, Eli Lilly etc. to manufacture and promote their products.

The top ten product ranges contributed 68% of total revenue in CY17. MyHep, a licensed generic of Sovaldi, was launched in March 2016 and has already contributed in excess of PKR 250mn in the topline of the Company. AGPL believes that their top 3 brands (Ceclor, Rigix and Osnate) have the potential to become a billion rupee brands within the next few years.

Sponsors Overview

OBS Group (“OBS”) is one of Pakistan’s leading corporations in the healthcare segment with a strong presence in Pakistan and Sri Lanka. At present, OBS ranks 8th amongst all pharmaceutical players in Pakistan with a group turnover in excess of PKR 10 billion.

OBS commenced operations in 1963 and became a name associated with quality medicine throughout Pakistan in 2006 after entering into a strategic alliance with Organon (part of Akzo Nobel). Since then, OBS has fostered strategic alliances with many reputable international firms including Organon, Merck & Co Inc, USA, Schering Plough, Mylan USA, Vifor and Santen Pharma Japan.


Reasons to Invest in AGP Limited

  • Part of OBS Group, the 8th largest pharmaceutical group in Pakistan
  • Top Brands (Rigix, Ceclor, Osnate) are forecast to contribute USD 10mn each to Revenue in the next 3 years
  • Exclusive Partnership with Mylan –  World’s 2nd largest generic drug manufacturer
  • First Pharmaceutical sector IPO in Pakistan after a gap of 22 years enhancing Sector free-float by 19%
  • Highest Gross Margin of 61% compared to  the industry average of 40%
  • Targeting a healthy sales growth of 19%/annum for the next 7 years
  • 5 New product launches in CY16 and 8 new launches in CY17
  • Targeting launch of 6 new products every year going forward
  • Approvals underway for Breast-Cancer drugs of Mylan which has potential to become Star Product given high occurrence
  • Recently entered the nutraceuticals segment and in process of setting-up a new plant
  • Drug registration for export to Sri Lanka, Kenya, Myanmar and Tajikistan is underway
  • Distribution agreement with Largest distributor of Pakistan – Muller & Phipps
  • Shariah-Compliant Company with strong governance – E&Y as Company Auditors
  • Renowned shareholders, including USAID, Muller & Phipps and Banks
  • Partnerships with Fortune 500 Pharmaceutical companies
  • Pakistan’s per capita pharma spending at only USD 15/annum compared to regional average of USD 35/annum translating to huge growth opportunities.

Ahsan Baig

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Inside Financial Markets was a joint publication of Pakistan Stock Exchange (PSX)and Society of Technical Analysts Pakistan (STAP)