Coronavirus
VERY HIGH
Pakistan Deaths
19,336
12624hr
Pakistan Cases
870,703
326524hr
Sindh
295,483
Punjab
323,314
Balochistan
23,728
Islamabad
78,725
KPK
125,914
Pakistan

Service Global Footwear Ltd. planning IPO to raise $10 million for joint investment

  • Pakistan's largest shoe exporter, Service Global Footwear Ltd., has planned an initial public offering (IPO) to raise funds from the domestic market to invest in the parent company's tire joint-venture.
  • Service Global Footwear plans to use the IPO proceeds to buy about 20% stake in a joint venture set up by Service Industries and China’s Chaoyang Long March Tyre Co.
Updated 17 Mar 2021

Pakistan's largest shoe exporter, Service Global Footwear Ltd., has planned an initial public offering (IPO) to raise funds from the domestic market to invest in the parent company's tire joint-venture.

According to Shahid Ali Habib, Chief Executive Officer at Arif Habib Ltd. and the only designated adviser to the IPO, the Lahore-based company aims to raise an estimated 1.6 billion rupees (or $10 million), offering 41 million shares at an introductory price of 38 rupees per share.

Habib added that the price could be boosted by as much as 40%, allowing Service Global Footwear to raise approximately $14 million, with the company scheduled to take investor orders as soon as the last week of March.

Service Global Footwear is a part of Service Industries Ltd., which employs more than 13,000 people, and is reputed for its shoes and tires in Pakistan.

The footwear unit supplies to brands including Zara, Dockers and Scholl. The business generates an annual revenue of about $44 million, with the capacity to produce up to 3.6 million pairs of shoes annually, exporting to European countries including Germany, France and Italy.

The Service Industries share grew by as much as 6.4% to a record 985 rupees.

The shoemaking company is part of the global rush to tap capital markets for funds, riding on positive investor sentiment, with Pakistan’s KSE-100 Index growing by 33% in the past year.

According to Habib, Service Global Footwear aims to use the proceeds generated from this IPO to buy a 20% stake in a joint-venture set up by Service Industries and China’s Chaoyang Long March Tyre Co..

The partnership will manufacture truck and bus radial tires in Pakistan for export purposes, from a factory near Karachi at a cost of about $250 million over a period of seven years - making it the largest investment in a tire manufacturing plant in the country, with the first phase of operations to start in August.