KARACHI, Feb 6: The initial public offering (IPO) of the term finance certificates of Gulistan Group of Companies have been heavily oversubscribed.

Group Finance Manager Saifee Zakiuddin told Dawn that all the three TFCs of three different entities of the group are of five years with two years call option. This means the group may redeem them after 24 months. The group has issued these listed TFCs (the combined worth of which is Rs1bn) to restructure its balance-sheet and to undertake some expansion plans through purchase of new textile machinery.

United Bank Ltd, the bankers as well as the trustee of the issues, said that for Gulistan Textile Mills the IPO attracted Rs510m worth of subscriptions against the offer of Rs80m; for Gulshan Spinning Mills Rs440 million also against Rs80m and for Paramount Spinning Mills Rs312m against Rs40m.

It said in a statement that for the first two entities the TFC issue consisted of a pre-IPO of Rs320 m each and an IPO of Rs80 million adding that for Gulistan Textile Mills over 20 entities participated in the pre-IPO and underwriting syndicate and for Gulshan Spinning Mills and Paramount Spinning Mills more than 10 entities each. “The pre-IPO and underwriting syndicates for all the three issues had a diverse mix of commercial banks, investment banks, development financial institutions, leasing and investment companies and gratuity funds etc.”

The Rs1 billion worth of three TFCs of the Gulistan Group represent the largest long-term TFC issues arranged for any textile group so far. The TFCs of Gulistan Textile Mills and Gulshan Spinning Mills have been assigned an instrument rating of ‘A’ whereas that of Paramount Spinning Mills has been assigned an instrument rating of ‘A+’ by JCR-VIS credit rating company.