KARACHI: Service Global Footwear Limited (SGFL), Pakistan’s largest shoe exporter, on Thursday raised $14.23 million (Rs 2.2 billion) in an oversubscribed two-day book building process at the Pakistan Stock Exchange (PSX), financial advisers for the transaction said.
Last month Service said it was planning an initial public offering in the domestic market to raise funds to invest in its parent’s tire joint venture.
Service Global Footwear is part of Service Industries Ltd., which has more than 13,000 employees and is known for its shoes and tires in Pakistan. The footwear unit supplies brands including Inditex SA’s Zara, Levi Strauss & Co.’s Dockers and Reckitt Benckiser Group Plc’s Scholl. The business has an annual revenue of about $44 million and exports to European countries such as Germany, France and Italy. It has a capacity to produce 3.6 million pairs of shoes annually.
Thursday’s book building was oversubscribed 5.8 times, with the price closing at Rs53.2 per share against the floor price of Rs38.
Arif Habib Limited (AHL), the financial adviser for the transaction, said the book building saw a total demand of Rs8.95 billion received against the issue size of Rs1.55 billion million. Service received offers for 172 million shares against 40.9 million offered in the book building.
Around 454 investors participated in the book building, including major commercial banks, insurance companies, local and foreign institutions, asset management companies, TREC holders and high net worth individuals.
“This was one of the largest participation by investors,” Shahid Ali Habib, CEO at Arif Habib Limited (AHL), told Arab News. “The market is highly liquid, the interest rate regime is low, and the best asset class at present in the market is equity. These are major factors that induced large investor participation … Investors are taking interest in the equities which have potential growth and expansion with high returns”.
Service Global Footwear plans to use the IPO proceeds to buy about 18.91% stake in a joint venture set up by Service Industries and China’s Chaoyang Long March Tyre Co., Habib told media last month.
The joint venture, Service Long March Tyres (Private) Limited, is the first All Steel Radial Truck & bus (TBR) Tyre manufacturing unit in Pakistan. The project is expected to be completed by June this year.
SLM’s plant, estimated to cost Rs 16.43 billion, will have initial production capacity of 600,000 tires per annum — to be increased to 2,400,000 tires per annum by 2027 in three phases.
Pakistan’s largest shoe exporter raises $14.23 million to invest in Chinese tire company
https://arab.news/4uk3d
Pakistan’s largest shoe exporter raises $14.23 million to invest in Chinese tire company
- Service Global Footwear will use IPO proceeds to buy 18.91% stake in joint venture with China’s Chaoyang Long March Tyre Co
- Thursday’s book building was oversubscribed 5.8 times, with the price closing at Rs53.2 per share against the floor price of Rs38
Pakistan’s first non-life Shariah-compliant takaful operator says ‘historic’ IPO oversubscribed 21 times
- Pak-Qatar General Takaful Limited offered 30 million shares to investors with ceiling price of Rs14 per share
- Company says IPO proceeds will be used for investments in software, infrastructure, setting up new branches
ISLAMABAD: Pakistan’s first non-life Shariah-compliant takaful operator announced on Thursday that its initial public offering (IPO) was oversubscribed 21 times at the country’s stock exchange, saying the development reflected strong investor confidence in the Islamic insurance system.
The Pak-Qatar General Takaful Limited said earlier this month it would issue 30 million shares with a floor price of Rs 10 and a ceiling price of Rs 14 per share. Institutional investors will receive 75 percent of the shares on offer, while the remaining 25 percent will be allocated to retail investors, it added.
“Pak-Qatar General Takaful Limited’s (PQGTL) IPO book-building has concluded with a historic oversubscription of [21x] times, marking the first-ever IPO of a dedicated General Takaful company at PSX,” the company said in a statement.
It said investors responded “strongly” as the strike price closed at Rs 14 per share, compared to the floor price of Rs 10. Total demand reached Rs 4.74 billion [$17 million].
The company said successful bidders will be provisionally allotted 22.5 million shares while the remaining 7.5 million shares will be offered to retail investors on Jan. 28-29.
Shahid Ali Habib, CEO of Arif Habib Ltd., which was the lead manager for the IPO, said that country’s first-ever IPO of any dedicated general takaful company, has made a historic debut at PSX.
Habib said this reflects investor confidence in Pakistan’s fast-growing takaful sector and PQGTL’s strong market position.
The statement further said proceeds from the IPO will be utilized to fund strategic initiatives, such as investments in software and other intangible assets, hardware and infrastructure, marketing and brand development and human resource enhancement.
Proceeds will also be used to establish new branches and transform existing ones to improve operational efficiency and customer experience, it added.
Pak-Qatar General Takaful Limited is part of Pakistan’s pioneer Islamic financial services group and is backed by Qatar-based financial institutions.
