Aided by economic recovery, Pakistan sees IPO record in FY21

Karachi: Aided by economic recovery, Pakistan witnessed eight equity Initial Public Offerings (IPOs) in fiscal year 2020-21 that raised a record Rs20.18 billion from the country’s capital markets, stated Arif Habib Limited (AHL) in a report released on Tuesday.

The development comes in tandem with the phenomenal rise in the KSE-100 Index that also rose close to 37% during the period.

“A total of 8 equity IPO transactions were witnessed during FY21 aided by a stark turnaround in the economy post initial outbreak of Covid-19,” stated AHL in its report titled, ‘PSX: Initial Public Offerings’.

“Companies listed on the Pakistan Stock Exchange (PSX) managed to raise equity north of Rs20 billion in FY21, highest ever capital raising (ex SPOs).

“This also marks the highest number of capital raising transactions (IPOs and preference share issuances) in 14 years (last high was 12 transactions in FY07).”

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The order book for all IPOs generated a demand of Rs44 billion, a 2.2x oversubscriptions as eager investors raced to get a piece of the pie.

The transactions executed during FY21 include: The Organic Meat Company, TPL Trakker Limited, Agha Steel Industries Limited, Panther Tyres Limited, Service Global Footwear Limited, Citi Pharma Limited and Pakistan Aluminum Beverage Cans Limited, along with one preference share issuance (Engro Polymer and Chemicals Limited).

A debt IPO was also executed in FY21 with Bank Alfalah Limited issuing a Term Finance Certificate to raise Rs11 billion, added the report.

In addition to this, a total of 25 companies issued right shares in the outgoing fiscal year, raising close to Rs50 billion.