KARACHI: Citi Pharma Ltd, a Lahore-based supplier of pharmaceutical raw materials, plans to raise around Rs3 billion ($18.8 million) by offering its shares on the Pakistan Stock Exchange to fund a hospital project and expand current operations, company officials said on Monday, in what will potentially be the biggest initial share sale by a drugmaker in Pakistan.
Among others, Citi Pharma Ltd. is the supplier of the Pakistani units of GlaxoSmithKline Plc and Abbott Laboratories.
Only 10 pharmaceutical companies are listed on Pakistan’s stock exchange currently, including Abbott Laboratories Pak, AGP Limited, GlaxoSmithKline Pakistan Limited and The Searle Company.
“We are offering around 72 million or 35 percent shares through the book building process,” Amir Zia, the company’s finance director, told Arab News on Monday. “We plan to raise Rs 2.5 billion, which potentially could go up to Rs 3 billion (cap)”, Zia said, adding: “We want to start construction of a hospital in Lahore for which Rs 1.5 to 1.7 billion would be required”.
Company officials are hopeful they will raise the required capital from the stock market during the month of Ramadan or immediately after to kickstart work on the 50-bed vertical integrated hospital for which land has already been acquired in Lahore’s posh Gulberg area. The remaining amount will be spent on expanding existing operations of the company to boost production of tablets, capsules and injectables and develop more ingredients, according to Zia.
“This will be the first company to be listed at the stock market that makes active pharmaceutical ingredients. The IPO would be the largest in the pharma sector,” said Muhammad Sohail, CEO of Topline Securities. “This is one of the key players that manufactures raw material for Pakistani pharmaceutical companies and its major client is GlaxoSmithKline … The minimum price of the share would be Rs 28 per share, that could go up to Rs 39.2 subject to approval.”
Citi Pharma, whose manufacturing facility is spread over an area of 47 acres, has posted 40 percent sales growth during the fiscal year that ended on June 30, 2020.
“This year, 2020-21, the revenue growth would be 100% and we expect that sales revenue would be Rs 7 billion,” the company’s finance director said. “We are estimating that by June 2025 the sales revenue with existing operations would be Rs 15 billion.”