KARACHI: Analysts have issued a “buy” call for the upcoming listing of Supernet Limited, a leading connectivity solutions provider and system integrator.
“We advise investors to subscribe for the company at this attractive offering price as we could see more investor interest in price discovery,” said a recent research note issued by Standard Capital Securities, a Karachi-based investment bank and brokerage house.
A wholly owned subsidiary of Telecard Limited, Supernet Limited offers a full portfolio of local-to-global integrated communications infrastructure solutions to telecommunication, defence, enterprise and government organisations.
It is selling 21.1 million ordinary shares constituting 18.81 per cent of its post-listing shareholding through the Growth Enterprise Market (GEM) board, a separate counter of the Pakistan Stock Exchange (PSX) reserved for up-and-coming companies.
The book-building process will take place on April 12-13 at the floor price of Rs22.50 per share, although the strike price can go up to Rs31.50 a share based on the interest from investors. Registration of the investors has already started from 7th April.
Of 18.81 percent shareholding on offer, 7.92 percent is being sold as offer-for-sale by Telecard Pakistan while 10.89 percent is being offered as fresh equity.
“Supernet Limited is not only inclined to serve connectivity needs of people but is also working on beyond-connectivity solutions consisting of cyber security solutions and services, infrastructure solutions and services, call centre services suite and business process automation,” said the brokerage.
The company’s revenue amounted to Rs2.46 billion in 2020-21 after growing at an annualised rate of 5.1 per cent for the last four years. Its net profit increased 9.8 times to Rs202.7 million on a year-on-year basis.
A breakdown of revenue shows Supernet Limited generated 50 percent of its top line from the telecom segment in 2020-21. About 40 percent of the company’s revenue originated from the enterprise segment. Defence and government segments contributed eight percent and three percent revenue, respectively.
Services-wise, data networking had the largest share in revenue (75 percent), followed by the sale of equipment and licences (14 percent) and turnkey projects (10 percent).
The proceeds from the offer-for-sale will be paid out to the sponsors and the fresh equity will be utilised for further expansion as well as the investment in subsidiaries and working capital.
Standard Capital Securities said the exponential growth of mobile data services, affordable service packages and the availability of smartphones have led to high adoption rates of Facebook, WhatsApp, Instagram, YouTube, Google, TikTok, etc.
“Moreover, localised services of online shopping, e-commerce, ride hailing/ delivery, food ordering and payment systems are disrupting various industries in the country and a new and vibrant ecosystem is developing around the tech and online businesses,” it said.
Copyright Business Recorder, 2022
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