Initial public offerings (IPOs) in Pakistan saw varying levels of activity between 2005-2014. In 2012, there were only 3 IPOs that raised a total of Rs. 500 million, significantly lower than the Rs. 4.8 billion raised in 2011. However, IPO activity increased in 2013 when 3 companies raised Rs. 4.2 billion after the change in government in May 2013. Upcoming IPOs in 2014 were expected to include Hascol Petroleum Limited, which planned to raise Rs. 1.4 billion for expanding operations.

1. IPOs in Pakistan

2. • The first time sale of stock to the public, called initial public
offering (IPO) is meant for raising funds after listing of the
company on the stock market(s) and issuing prospectus and
meeting other legal formalities as prescribed under the law.

3. IPOs in Pakistan during 2005 -
2013
No of years
• 2005 14
• 2006 5
• 2007 9
• 2008 10
• 2009 3
• 2010 5
• 2011 4
• 2012 3
• 2013 3
• 2014 5 (expected)
No of companies

4. 2012

5. IPOs in the year 2012
• The stock market saw only three Initial Public Offerings (IPOs)
in the year 2012. Since no other companies were noted to be
‘in process of formal listing’ or ‘provisionally listed’ on the KSE
quotation sheet

6. Three IPOs in 2012
Next Capital with
offer of 10 million
shares, valued at
Rs100 million
TPL Tracker 30
million shares of
Rs300 million
Aisha Textile offering of
10 million shares
valued at Rs100 million

7. low level of listing why??
• Analyst at brokerage Topline Securities mentioned that the
current low level of listing was seen after six years; the
number also compared unfavorably with the issues in the last
10 years.
• Karachi Stock Exchange has performed exceedingly well as it
has gained 48 per cent (38 per cent in dollar terms),
outperforming all emerging and cash-rich markets of the
world. So why did the corporates in need of cash avoid the
capital markets?
• “The reduced demand to raise capital from the market was on
account of slowdown in economic activity,” say analysts.

8. Offerings and issues
• During the year 2012, initial stocks worth Rs500 million ($5m)
were offered .The figure comes up to just about one-tenth of
the new stock offerings of Rs4.8 billion ($56m) the previous
year.
• The stock offer to the public was in the sum of Rs500 million
($5m). HNWI and local/foreign institutions were offered Rs275
million ($3m) through private placement and book building.
• Out of the three incoming issues,
I. Next Capital related to financial services; the offer was
undersubscribed
II. TPL was technology related and was oversubscribed by 1.2
times
III. Aisha Steel was significantly oversubscribed by 2.7 times

9. 2013

10. All public offering after
political change
• All 3 IPOs of outgoing year 2013 took place after the PML (N)
government came into power in May 2013.
• It indicates investors’ confidence and high expectations with
the incumbent government.
• With capital markets a potent tool to raise capital, all 3 IPOs
after the change of government show increased demand of
fresh capital on account of expected uptick in economic
activity, going forward.

11. IPOs in the year 2013
• During outgoing 2013, a total shares of worth Rs4.2bn
(US$41.1mn) were offered to general public, HNWI (High Net
Worth Individuals) and local/foreign institutions through IPO
and book building, which is substantially higher than Rs500mn
(U$$5mn) offered in 2012.
Out of total amount Rs4.2bn offered in 2013:
• Rs827mn (US$8.2mn) was offered to general public
• Rs3.3bn (US$33.0mn) was offered to HNWI and local/foreign
institutions
through private placement and book building.

12. All 3 IPOs were oversubscribed
1. Lalpir Power Ltd.: Lalpir's principal activity is to own,
operate and maintain oil fired power stations. Lalpir’s public
offer was significantly oversubscribed by 6 times.(bids
received for 170 million shares against an offer of 28.4
million shares)
2. The strike price determined via Dutch Auction Method was
rupees 22 per share against a set floor price of rupees 15
per share.
3. Engro Fertilizer was chemicals related whereas Engro
Fertilizer’s book building was oversubscribed by 2.9 times.
4. Avanceon Ltd. was from the technology sector. And
Avanceon’s book building got oversubscribed marginally by
0.03 times

13. 2014

14. Upcoming IPOs in 2014
• Managing Director Aftab Ahmed Chaudary , LSE ,
stated in his interview with The Nation, that the equity market
will see Initial Public Offerings of at least five companies
in FY 2014.

15. Hascol Petroleum Limited IPO
• Hascol was incorporated in March 2001 under the Companies
Ordinance, 1984 to take advantage of the petroleum sector’s
deregulation and undertake a program for owing, leasing and
renting oil storage facilities as well as importing petroleum
products for its own account.
• The capital issue of the oil marketing company consists of 25
million ordinary shares – or 27.6% of the company’s post-issue
paid-up capital – with a face value of Rs10 each. The book-
building portion, which took place on March 4 and 5,
comprised 18.7 million ordinary shares, or 75% of the total
issue size, at strike price of Rs 56.5/share.

16. Hascol IPO cont..
• Referring to the remaining 25% of the total issue size, the
public subscription was held in either the last week of March
or the first week of April. This means roughly 6.2 million
ordinary shares were issued to the general public at the rate
of Rs56.5 per share
• The company’s profit after tax in fiscal 2013 was Rs392 million.
It increased at an annualised rate of over 40% during the last
four years.
• The objective of the issue is to inject additional equity into the
company for the completion of Machike storage facility in
Sheikhupura and for setting up new retail outlets across
Pakistan.