Syed Zaki HussainKARACHI: Pakistan market saw record offerings in the year 2021 where the bourse witnessed eight Initial Public Offerings (IPOs), including 2 GEM board offerings, highest after 2015.
Total amount raised from investors from these eight offerings clocked in at Rs 20 billion during 2021.
In 2015, there were 8 offerings as a total of Rs 116 billion was raised through primary and secondary offering including the secondary offering of Habib Bank (HBL) by government of Pakistan which alone raised Rs 102 billion.
The market saw immense enthusiasm in these offerings during the year as all of them were oversubscribed.
Amongst all the these listings, Octopus Digital (OCTOPUS) posted the highest return of 46 percent since its listing followed by Citi Pharma (CPHL) which posted return of 5.0 percent. On other hand, Pakistan Pak Agro (GEMPAPL) and Panther Tyres (PTL) posted decline of 35 percent and 33 percent, respectively.
Interestingly these offerings saw huge investor interest despite dull performance by the KSE-100 index which saw 2.0 percent decline in PKR terms and 12 percent in US$ terms in 2021 to date.
“If macro economic situation in Pakistan stabilizes post resumption of IMF program, we will continue to see new offerings in 2022,” Umair Naseer at Topline Securities said.
Though, there are few IPOs in pipeline as companies plans to expand their capacities but the outlook on IPOs will be dependent upon the overall economic and market conditions in 2022, he added.
In main board, 6 companies raised funds. These companies represented various sectors including Auto, Footwear, Technology and Communication, Pharmaceutical, Packaging and Logistics.
Panther Tyres (PTL): PTL was the first IPO of 2021 and it came at a strike price of Rs 65.8. The Company offered 40 million shares and raised Rs 2.6 billion to fund its tyre capacity expansion.
Service Global Footwear (SGF): SGF raised Rs 2.1 billion by offering 41 million shares at a strike price of Rs 53.2. The purpose of this IPO was to take equity stake of 19 percent in Service Long March Tyres (PVT) Limited (SLM) which increased SGF holding in SLM to 51 percent. SLM is the first company in Pakistan to bring in new technology of TBR tyre manufacturing to Pakistan.
Citi Pharma (CPHL): CPHL raised Rs 2.3 billion at strike price of Rs 32, offering 73 million shares. The aim of this issue was to expand its existing Paracetamol capacities and add more products to its portfolio. Moreover, the company also intended to expand formulations businesses and develop a state-of-the-art 50-bed hospital at Gulberg (Lahore).
Pakistan Aluminum Beverage Cans Limited (PABC): PABC raised Rs 4.6 billion against offering of 94 million shares at strike price of Rs 49. The principal purpose of this offer for sale was to list PABC on PSX and broaden the shareholder base. Funds gathered went to Ashmore, a UK-based firm which planned to divest 26 percent stake from its 51 percent stake through the auction.
Air Link Communication Limited (AIRLINK): AIRLINK was the biggest IPO of 2021 raising Rs 6.0 billion from investors by offering 90 million shares at strike price of Rs 71.5. The purpose of this IPO was to fund increased retail outlets and inject working capital for further expansion.
Octopus Digital Limited (OCTOPUS): OCTOPUS remained the most popular IPO of the year as it received an overwhelming response with bids of over Rs 30 billion against total issue of Rs 1.1 billion (27.3 million shared offered at Rs 40.6). Company’s aim to raise capital was for development of intellectual properties (IPs) and to launch various digital dashboard platforms. It remained the best performing IPO of the year posting return of 46 percent.
Pakistan Stock Exchange (PSX) saw major development as companies started offering shares through GEM board. The aim of GEM board was to encourage Small and Medium Enterprise (SMEs), greenfield projects and tech companies to list on the exchange and raise capital. Previously, SMEs found it cumbersome to list on PSX but with easier regulatory requirements we saw 2 listings on GEM board in 2021.
The two listings on GEM board were Pak Agro Packaging (GEMPAPL) and Universal Network Systems Limited (GEMUNSL).
Pak Agro Packaging Limited (GEMPAPL): GEMPAPL was Pakistan’s first GEM board listing raising Rs 198 million by offering 8 million shares at strike price of Rs 24.75 per share. The purpose of this IPO was to add 600 MTPA of fish-net manufacturing capacity coupled with working capital requirement.
Universal Network Systems Limited (GEMUNSL): GEMUNSL was the first ecommerce tech enabled logistics company to be listed on PSX. The company raised Rs 446 million by offering 6.9 million shares at a price of Rs 65. The purpose of this IPO was to utilize funds to widen its country-wide network and invest in technology.
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