KARACHI: Pak Agro Packaging Ltd (PAPL) raised Rs198 million through the initial offering of its 40 per cent post-listing stake via book building on Thursday.

Speaking to Dawn, AKD Securities Head of Investment Banking Syed Khurram Shahid said the strike price was Rs24.75 per share versus the floor price of 22.50 per share.

AKD Securities served as adviser to the issue, which was oversubscribed 1.85 times. Investors placed bids for 14.8m shares for the 8m shares that were up for grabs, Mr Shahid added.

The offer constitutes the maiden listing on the Growth Enterprise Market (GEM) Board of the Pakistan Stock Exchange (PSX). The GEM Board is reserved for “growth companies” that are exposed to a higher degree of investment risk, including liquidity risk, than mature companies that are typically listed on the main board of the PSX.

Given the floor price of Rs22.50 per share, the company was to raise at least Rs180m. The strike price could possibly go up 40pc based on interest from investors, which would’ve raised a maximum amount of Rs252m. The entire issue was offered via book building to “accredited investors” who could place bids starting from Rs100,000.

PAPL manufactures items for storage and packaging, protection and enhancement and fishing/livestock uses. In addition, it produces products to meet farmers’ crop production and shading needs.

The company intends to use the proceeds of the issue to fund its diversification into fishing net manufacturing, with Rs92m in capital expenditure on plant and machinery. Additionally, it wants to use Rs73m in working capital to fund operations — existing and fish nets — besides spending Rs15m in construction outlays.

PAPL has so far been a family-owned business with major shareholders being Dr Safdar Ali Butt, Khalid Butt and Kaisra Jabeen. The company’s manufacturing facility is situated on a two-acre facility in Phase IV of Hattar Industrial Estate, Haripur, Khyber-Pakhtunkhwa, about 40kms from Islamabad.

Its revenue increased 83.7pc to Rs402.5m last year. The company’s net profit amounted to Rs33.6m versus a net loss of Rs54.1m a year ago. Its earnings per share in the latest financial year would be Rs1.68 after accounting for the post-issue adjustment.

The company has maintained a five-year average debt/assets ratio of 41.4pc, which is driven from short-term debt acquired to fund working capital requirements and exacerbated by a fire incident in 2020.

Published in Dawn, November 5th, 2021

Opinion

Editorial

Punjab crisis
01 Dec, 2022

Punjab crisis

ADMINISTRATIVE chaos has ruled Punjab ever since the ouster of the PTI government in April, deepening the...
Quetta attack
01 Dec, 2022

Quetta attack

It would be foolishness of the highest order were the authorities to ignore the emerging threat.
World AIDS Day
01 Dec, 2022

World AIDS Day

AS countries mark World AIDS Day on Dec 1, a timely report from Unicef has renewed concerns about the severe...
A call for bloodshed
30 Nov, 2022

A call for bloodshed

The state has wasted precious time by not consolidating its success in pushing TTP out of its strongholds in the north.
Missing childhoods
30 Nov, 2022

Missing childhoods

THE fact is that despite some legal efforts to end the curse of child marriage taking place in Pakistan under the...
Unemployment concerns
30 Nov, 2022

Unemployment concerns

THE ILO finding that labour market recovery from the impact of the Covid-19 pandemic in Pakistan, as in many other...