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KARACHI: As many as 8 equity IPO (Initial Public Offering) transactions were witnessed during FY21 aided by a stark turnaround in the economy post-initial outbreak of Covid-19. Total transactions include 7 new listings - 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), and one preference share issuance (Engro Polymer and Chemicals Limited).

The companies listed on Pakistan Stock Exchange (PSX) managed to raise equity Rs 20 billion in FY21, highest-ever capital raising (ex-SPOs), an analyst at Arif Habib Limited said.

This also marks the highest number of capital raising transactions (IPOs and preference share issuances) in 14 years as last high was 12 transactions in FY07, he added. It is pertinent to highlight the flush of liquidity in the market, with order book for all IPOs generating a demand of Rs 44billion against the Rs 20billion raised, translating to a 2.2x oversubscription for new listings at the index, he said.

Apart from the aforementioned, a debt IPO was also executed during FY21. Bank Alfalah Limited issued a Term Finance Certificate (TFC) to raise up to Rs 11billion. Hence, total capital raised via Debt plus Equity IPOs arrived at Rs 31billion in FY21.

In addition to this, a total of 25 companies issued right shares in the outgoing year, raising Rs 50billion in capital. Equity Initial Public Offerings (IPOs) during FY21:

The Organic Meat Company (TOMCL): The company is principally engaged in the sale and purchase of livestock, slaughtering animals by Halal standards and processing and packaging of meat and allied products. This was the first IPO of FY21 whereby principal purpose of the capital raising (Rs 800million at a strike price of Rs 20/share against floor of Rs 18/share) was to finance two offal processing facilities.

TPL Trakker Limited: TPLT is engaged in providing technology solutions, focused on connected car, data and location services, and industrial IoT technologies. The company wanted to raise money to partially repay a previously issued Commercial Paper. It raised Rs 802million at a strike price of Rs 12/share.

Agha Steel Industries Limited: AGHA is the first and only electric arc furnace facility in the country producing high quality steel bars, wire rods and billets. The company raised Rs 3.8billion at a strike price of Rs 32/share (floor price Rs 30/share) to finance the second phase of its expansion, bringing the internationally recognized Mi. Da Rolling Mill to Pakistan.

Panther Tyres Limited: Part of the tyres and tubes industry, PTL has also ventured into the trading business of automobile spare parts and lubricants. Purpose of the IPO was to partially fund the Company's expansion project whereby the company enhanced the production capacities of Tyre Sets and Tubes (Packed). The company raised Rs 2.6billion at a strike price of Rs 65.80/share (floor price of Rs 47/share).

Service Global Footwear Limited: SGF is involved in the manufacturing, sale, marketing, import and export of footwear, leather and allied products. The company raised Rs 2.2billion at a strike price of Rs 53.20/share (floor price of Rs 38/share) to sponsor equity investment into a group company i.e. "Service Long March Tyres (Pvt.) Limited."

Citi Pharma Limited: The principal business activity of CPL is manufacturing and sale of pharmaceuticals, medical chemicals and botanical products. It generated Rs 2.3billion through its IPO at a strike price of Rs 32/share (floor price of Rs 28/share) to augment existing capacity for paracetamol, add new APIs to its current product line and establish a 50-bed art healthcare facility.

Pakistan Aluminum Beverage Cans Limited: Last IPO of the year remained the largest in terms of capital raised. PABC, a manufacturer of aluminum beverage cans in Pakistan, raised Rs 4.6billion at a strike price of Rs 49/share (floor price of Rs 35/share).

Engro Polymer and Chemicals Limited: A subsidiary of Engro Corporation Limited, the company manufactures, markets and sells Poly Vinyl Chloride (PVC), Vinyl Chloride Monomer (VCM), Caustic soda and other related chemicals. EPCL issued 300million convertible preference shares during the year at a par value of Rs 10/share, raising Rs 3.0 billion, to fund the debt portion for its PVC expansion.

Debt IPO during FY21 1.

Bank Alfalah Limited: BAFL issued a TFC in denominations of Rs 5,000, offering a coupon rate of 9.03 percent p.a. with the purpose of hedging the issuer's fixed rate assets, ie, staff loans, consumer loan portfolio etc. with fixed rate liabilities. The bank raised Rs 11billion and utilized it to primarily invest in Government of Pakistan issued securities.

Copyright Business Recorder, 2021

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