KARACHI: Pakistan Stock Exchange (PSX) saw an increase in listing of new companies in 2024, with the bourse witnessing 7 IPOs (including 2 GEM Board offerings), compared to just one IPO in the previous year.
The total amount raised from investors through the 07 offerings in 2024 stood at Rs 8.4 billion, marking the highest level since 2021, when there were 08 offerings that raised a total of Rs 19.9 billion.
The market saw immense enthusiasm in these offerings during the year as all of them were oversubscribed.
“We attribute this as a good year for IPOs, driven by macroeconomic stability under the IMF program, coupled with positive market sentiment, high liquidity, falling interest rates and political stability, which encouraged equity investment,” an analyst at Topline Securities said.
The benchmark KSE-100 Index surged significantly by 83 percent in PKR terms and 85 percent in USD terms in 2024 to date, reflecting overall positive sentiment and renewed investor interest.
The average daily traded volumes have also increased by 69 percent, reaching 545 million shares, while the daily traded value has risen by 108 percent to Rs 21 billion during 2024 to-date.
In 2024, new listings on the Main Board included Secure Logistics (SLGL), TPL REIT Fund-I (TPLRF1), International Packaging (IPAK), Fast Cables (FCL), and BF Biosciences (BFBIO). Meanwhile, Mughal Energy (GEMMEL) and Burj Clean Energy (GEMBCEM) were added to the GEM Board.
Pakistan market outperformed the global trend, which saw a slowdown in IPO activity. As per Ernst & Young (E&Y), a total of 870 IPOs were witnessed till nine months of 2024 raising $78 billion compared to 983 IPOs raising $101 billion in same period last year.
“This decline reflects the global slowdown in new IPOs, attributed to the transition where factors such as economic deceleration, US presidential elections, geopolitical frictions and regulatory shifts casted a shadow of uncertainty over the investment realm, posing potential challenges to the IPO market.”
“We believe, more IPOs coming to market in 2025 as market valuations have sizably increased,” the analyst said. Furthermore, abundant availability of liquidity amidst conversion from fixed income will also encourage companies to offer shares in market, he added.
In the main-board, 05 companies raised funds. These companies represented various sectors including Transport, Real Estate Investment, Paper Board & Packaging, Cable & Electrical Goods, and Pharmaceuticals.
Secure Logistics Group Limited (SLGL): The company is involved in two main business segments i.e. Logistics & Tracking and Fleet Management Services. The primary purpose of the IPO was to deleverage the balance sheet amid an unprecedented high-interest-rate environment, enhance the company’s infrastructure and technology base to support the Tech-Pivot initiative, facilitate expansion into the regional market, and optimize fleet-related efficiencies. The company offered 50mn shares at strike price of Rs 12/share, raising Rs 600 million in August 2024 with an oversubscription of 1.02x.
TPL REIT Fund I (TPLRF1): The REIT Scheme is part of TPL Group which is Pakistan’s prominent technology conglomerate with businesses across a variety of sectors. The principal activity of the fund is investing in real estate projects through Special Purpose Vehicles (SPVs) in accordance with the constitutive documents and applicable laws to generate income/returns for investors through rental income and capital appreciation. The purpose of offer for sales is (1) Compliance with REIT Regulations, (2) Unblocking of Units, (3) Interest of Foreign Investors, and (4) Price discovery. The company offered 19.4 million shares at fixed price of Rs 17.6/share, raising Rs 589 million in May 2024 with an oversubscription of 1.46x.
International Packaging Films Limited (IPAK): The company is principally engaged in the manufacturing and sale of flexible packaging materials mainly comprising of BOPP (Biaxially-oriented Polypropylene) films and allied products. IPAK seeks listing with the sole purpose of raising funds to repay long-term debt, which the company obtained to finance its expansion project. Expansion project was aimed at increasing the capacity of BOPP films from 41,000 tons to 100,000 tons and introduce Biaxially Oriented Polyethylene Terephthalate (BOPET) films with capacity of 42,000 tons. The total cost of expansion was around Rs 22 billion. The company offered 70.1 million shares at strike price of Rs 25.2/share, raising Rs 1,767 million in June 2024 with an oversubscription of 1.73x.
Fast Cables Limited (FCL): Fast Cables is a preeminent local manufacturer of top-quality electrical cables and conductors in Pakistan. The company raised funds to be utilized for: (1) the acquisition of new land, (2) the construction of a state-of-the-art building, (3) the installation of new plant and machinery, (4) the repayment of debt associated with the machinery, and (5) the development of building components. The company offered 128 million shares at strike price of Rs 24.5/share, raising Rs 3,130 million in June 2024 with an oversubscription of 1.57x.
BF Biosciences Limited (BFBIO): BF Biosciences Limited is a joint venture between Ferozsons Laboratories Limited and Argentina’s Bagó Group, incorporated in 2006. The company raised funds to be utilized in: (1) purchasing raw and packing materials to meet post-expansion working capital needs, (2) purchasing plant and machinery to broaden the product base and improve process efficiencies, and (3) acquiring export certifications such as PIC/S and SRA, as well as supporting new product development, including Glucagon-like Peptide (GLP-1). The company offered 25 million shares at strike price of Rs 77/share, raising Rs 1,925 million in August 2024 with an oversubscription of 3.4x.
Copyright media, 2024
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