IPO oversubscribed: IPAK raises Rs1.77bn in book-building process

KARACHI: The book-building process of International Packaging Films Limited’s (IPAK) Initial Public Offer (IPO) has concluded with an oversubscription of 1.73 times, the company said on Thursday.

The IPO received an overwhelming response from institutional investors and high-net worth individuals as the strike price clocked in at Rs 25.2 per share, higher than the floor price of Rs 21, the leading flexible packaging films manufacturer of the country said.

International Packaging Films Limited is going to raise Rs 1.77 billion in total. IPAK listing is a significant event as IPAK is the largest manufacturer of flexible packaging film.

Several brokerages had issued almost unanimous calls to ‘subscribe,’ which resulted in investor demand amounting to Rs 1.77 billion against the IPO’s book-building size of Rs 1.47 billion at the floor price.

The general public will subscribe to 17,526,364 shares (25 percent of the total offer size) on May 15-16 at the strike price of Rs 25.2, the company said. The proceeds from IPO will be utilized to pay off some of the debts.

Naveed Godil, CEO International Packaging Films Limited, in his message thanked investors for their overwhelming response.

Muhammad Amin, Chairman of International Packaging Films Limited expressed his gratitude for the confidence of investors in the company. He said “There is a tremendous potential to increase shareholders’ value. The Board and the management is fully committed to the plan and has a clear strategy of increasing market share, driving growth of domestic market through import substitution and increasing specialized films export”. “As we grow, a wider number of shareholders will reap the benefits post IPO,” he said.

International Packaging Films Limited recorded net sales of Rs 19.9 billion in the year 2023 while its gross margin for the financial year 2023 remained 27 percent. Its profit before tax for year 2023 was Rs 2.9 billion while its net profit after tax was Rs 1.6 billion. The company’s 3-year revenue CGAR remained at 41 percent.

The group collectively offers a complete portfolio of packaging solutions, producing BOPP, CPP, and BOPET films, making it the first-ever group in Pakistan to provide one-window flexible packaging solutions, located at two strategically important locations in the country.

“We have received overwhelming participation across offshore investors, local institutions and high net worth individual investors in this amazing IPO of largest flexible packaging film company. This is the first time that RDA investors have decently participated in the Book building of any IPO in Pakistan.

The transaction is oversubscribed by 1.73 x with a total demand of Rs 2.54 billion against the issue size of Rs1.47 billion. Due to significant oversubscription, the strike rate registered at 25.2 which is 20% premium to floor price of 21,” said Shahid Ali Habib, Chief executive Arif Habib Limited.

Copyright Business Recorder, 2024