KARACHI: A Pakistani business entity providing comprehensive logistical services is all set to launch its initial public offering (IPO) next week, making it the first player in its sector that plans to raise capital of about Rs600 million ($2.1 million) from public investors.
Secure Logistics Group (SLG), an integrated logistics firm with synergistic business lines in logistics, asset tracking, and security services, plans its IPO through a book-building process on March 27 and 28, offering 50 million shares at a floor price of Rs12 each.
Prior to that, the group has already secured Rs585 million ($2 million) from Jeddah-based Saudi Bugshan Group and Karandaaz Pakistan.
“The IPO is important because this is the first in the logistic space at the main board of Pakistan Stock Exchange (PSX) and is being offered at discounted book value of the company,” Shahid Ali Habib, CEO of Arif Habib, the book runner and lead manager of the transaction, told Arab News.
The company has posted an earnings per share (EPS) of Rs2.28 for 2023. The book value of the company, as of December 2023, is Rs17.43.
Initial public offerings are the first-time sale of securities by unlisted companies to the general public. They are among various fundraising modes utilized by the corporates to meet their financial needs.
The SLG plans to utilize the proceeds raised from the IPO to de-leverage its balance sheet and expand its logistics business to accelerate its transformation of traditional logistics segment.
“The primary purpose of the equity capital raising is to de-leverage the balance sheet in an unprecedented high interest rate environment, enhance the company’s technology infrastructure base to complete the ongoing tech-pivot and initiate expansion into the regional markets,” said Habib.
The company has already arranged pre-IPO investment amounts to an aggregate of Rs585 from Saudi Bugshan Group, also known as KBP, a diversified conglomerate headquartered in Jeddah, Saudi Arabia and Karandaaz Pakistan which will be converting its shareholder loan to equity.
The share of the Saudi Bugshan Group will increase from 13.6 percent to 17 percent after the IPO, according to Habib.
The Saudi Bugshan with its operations spreading into several countries in the Middle East and North Africa, such as Saudi Arabia, the United Arab Emirates, Egypt, Morocco, Algeria and Yemen, is the strategic investor in the SLG.
“The strategic partnership of Saudi company in Pakistan and its further investment in the SLG is a very positive step and this will encourage other regional and international players to invest in Pakistan,” Habib added.
The SLG management expects that road transportation in the country under the multibillion-dollar China-Pakistan Economic Corridor (CPEC) will “take off” in the next few years.
“SLG will also be pursuing logistics assignments on the CPEC route to Western China (Kashgar) and Central Asian countries which will provide attractive opportunities,” the group said in a statement. “SLG also plans to be a ‘Regional Player’ by connecting with Central Asian markets.”
Road transport accounts for more than 95 percent of the inland freight carriage in Pakistan and is the backbone of logistics.
Habib said Pakistan’s equity market is currently attractive for more local and foreign IPOs.
