PSX wit­nesses three IPOs of Rs8.6 billion in 2017

Enterprise - - National news -

At least three com­pa­nies raised Rs8.6 billion by of­fer­ing their shares to pub­lic dur­ing the out­go­ing year to cap­i­talise on the bull run driven by MSCI up­grade.

The eq­uity mar­ket also wit­nessed three ini­tial pub­lic of­fer­ings (IPOs) in 2016, but they raised Rs4.2 billion.

In 2017, Pak­istan Stock Ex­change (PSX) raised Rs4.49 billion in pri­mary of­fer­ings through float­ing 160.3 mil­lion shares at a floor price of 28/share. Its strike price re­mained the same.

The issue was 20 per­cent of the PSX’s stake. Ear­lier, its 40 per­cent strate­gic stake was sold to a con­sor­tium of Chi­nese in­vestors. On the first day of trade, it dropped five per­cent, while it has so far shed 33 per­cent to trade at Rs18.8 per share.

The sec­ond largest IPO was of Roshan Pack­ages Lim­ited, a pack­ag­ing com­pany, with Rs2.8 billion against 32.5 mil­lion shares for 35/share. The issue was over­sub­scribed 6.8 times and struck at a whop­ping Rs86.25/ share, 2.5 times higher than the floor.

Steel maker It­te­faq Iron In­dus­tries raised Rs1.26 billion with 41.75 mil­lion shares at floor price of Rs12/share. The issue was over­sub­scribed by 2.5 times, while the striking price rose 2.5 times to Rs30.2/share.

An­a­lyst Ad­nan Sami at Topline Se­cu­ri­ties said five more IPOs are ex­pected dur­ing the next year. Towel maker Hira Terry Mill plans to float 25 mil­lion shares at a floor price of Rs23/share. TPL Life In­sur­ance wants to float 40 mil­lion shares at a floor price of Rs10/share. Ethanol pro­ducer Uni­col Lim­ited plans to issue 37.5 mil­lion shares at a floor of Rs24/share.

Rice pro­ces­sor Matco Foods aims to issue 29.1 shares at Rs26/share and elec­tric­ity pro­ducer Lib­erty Power Tech eyes an IPO for 126.1 mil­lion shares for Rs40/share. “The year 2017 turned out to be a tale of two halves for the KSE 100-share In­dex,” Sami said. He said the first half saw a bull run fu­elled by MSCI-EM (Mor­gan Stan­ley Cap­i­tal In­ter­na­tional) in­clu­sion eu­pho­ria as the mar­ket ral­lied up on May 24 with a year-to-date (YTD) gain of 11 per­cent. “Sub­se­quently, the in­dex shed a whop­ping 25 per­cent from its peak and took YTD re­turn down to 17 per­cent.”

The mar­ket posted a sig­nif­i­cant de­cline in 2017 af­ter strong gains in the past five years with com­pound an­nual growth rate of 33 per­cent (29 per­cent in dol­lar terms) and KSE 100-share in­dex soared to 48,000 points from the 11,000-point mark.

Topline an­a­lyst said at least three IPOs were de­layed dur­ing the year due to some reg­u­la­tory set­backs. For ex­am­ple, In­box Business Tech­nolo­gies, soft­ware house of Da­wood Group, planned to issue 45.4 mil­lion shares at Rs30 per share. Dalda Foods wanted to float 82.5 mil­lion shares at Rs85 per share, while AGP Phar­ma­ceu­ti­cals aimed to of­fer 35 mil­lion shares for Rs40 per share.

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