What is IPO? History of IPO. Practical study of IPO. SWOT analysis Conclusion Recomandation

2. INITIAL PUBLIC OFFERING
Presented by:
SOHAIB
MBA (B&F)
1st Semester
Allama Iqbal Open University (AIOU)

3. WHAT IS IPO?
 IPO stands for Initial public offering.
 It is a type of public offering in which shares of stock of a company are
sold to institutional investors.
 Through this process, a private company becomes a public limited
company
 Majorly done to raise Capital
 Process is directed towards both institutional & the retail investors

4. HISTORY OF IPO
 The earliest form of a company which issued
public shares was the publicani during the
Roman Republic.
 The first modern IPO occurred in March 1602
when the Dutch East India Company, offered
shares of the company to the public in order
to raise capital.
 In the United States, the first IPO was the
public offering of Bank of North America
around 1783.

5. PRACTICAL STUDY OF IPO
 Engro Corporation limited
 Engro Powergen Qadirpur Limited

6. ENGRO CORPORATION LIMITED
 largest industrial corporations in Pakistan
 operating in Fertilizer, Foods, Energy and
Chemicals
 public limited company
 listed on the KSE, LSE and ISE.
 started operations in 1957
 In 1965 started manufacturing and
marketing fertilizers
 invested over USD 1.9 billion in projects
from 2007 to 2011
 largest private sector companies

7. ENGRO POWERGEN QADIRPUR LIMITED
 Incorpated in 2008 to develop power
generation projects and sale
 Owned subsidiary of engro corporation
limited
 Producing 217.98 (net) MW energy through
combined cycle power plant
 Operation started 27 march, 2010
 Power is transmitted to NTDC under PPA
 Listed on KSE in October 2014 where 25%
shares were offered

8. CASE STUDY WITH RESPECT TO TOPIC
 Offeror
1.Engro Corporation Limited 2.Engro Powergen Limited.
 Offer
Offer for Sale of 40,475,000 Ordinary Shares of EPQL (12.5% of
the Total Paid Up Capital of the Company) at an Offer Price of
PKR 30.02/- per share including premium of PKR 20.02/- per
share.
 Offer Price
The price at which Ordinary Shares of the Company are being
offered. The Offer Price is PKR 30.02/- per share.
 Ordinary Shares
Ordinary Shares of Engro Powergen Qadirpur Limited having
face value PKR 10.00/- each unless otherwise specified in the
context thereof
 Financial Advisors, Lead Managers & Arrangers
1.Habib Bank Limited 2. Bank Alfalah Limited.

9. SHARE CAPITAL AND RELATED ISSUES SHARE
CAPITAL
No.of
shares
Face value Premium Total (including
premium)
PKR (PKR) (PKR)
AUTHORIZED CAPITAL
330,000,000 Ordinary Shares of
PKR 10/- each
3,300,000,000 - 3,300,000,000
ISSUED, SUBSCRIBED AND PAID UP SHARE CAPITAL
323,800,000 Issued against Cash 3,238,000,000 80,777,000 3,318,777,000
323,800,000 Total 3,238,000,000 80,777,000 3,318,777,000
The existing issued, subscribed & paid up capital of the Company is held as follows:
SPONSORS
32,000,000 Engro Corporation
Limited
320,000,000 - 320,000,000
271,999,992 Engro Powergen
Limited
2,719,999,920 - 2,719,999,920
OTHER SHAREHOLDERS
16,000,000 International
Finance
Corporation(1)
160,000,000 56,511,500 216,511,500
DIRECTORS
1 Mr. Ruhail
Mohammed
10 - 10
1 Mr. Muhammad Ali 10 - 10
1 Mr. Shabbir Hashmi 10 - 10
1 Mr. Javed Akbar 10 - 10
1 Ms. Aliya Yusuf 10 - 10
1 Mr. Vaqar Zakaria 10 - 10
1 Mr. Muhammad
Aliuddin Ansari
10 - 10
1 Mr. Shahid Hamid
Pracha
10 - 10
3,800,000 Employees under
the Employee Share
Option Scheme(2)
38,000,000 24,265,500 62,265,500
323,800,000 Total Paid up
Capital
3,238,000,000 80,777,000 3,318,777,000

10. ESTIMATED EXPENSES TO THE
OFFER FOR SALE
Expenses Amount (PKR)
Financial Advisor & Lead Arrangers Fee 22,357,095
Underwriting Commission – General Public 9,112,946
Take up Commission – General Public 3,037,649
Brokerage to Members of the Stock Exchange 12,150,595
Bankers to the Offer Commission 3,037,649
Printing, Publication and Notice Costs 3,000,000
KSE Initial Listing Fee, Annual Listing Fee, Service
Charges
3,118,012
SECP Application and Processing Fee 200,000
Balloting Agent 2,220,000
Marketing Cost 5,000,000
Legal & Professional Fee 1,500,000
Miscellaneous Cost 5,000,000
Total 69,733,946

11. SWOT ANALYSIS

12. STRENGTHS
 Product innovation
 Quality Products
 Strong brand name
 Market share
WEAKNESSES
 High price
 Slective target market
 High milk collection and distribution costs

13. OPPORTUNITIES
o e-ipo facility
o production capacity
o Provide customer service order line
THREATS
 Giant competitor in the market
 New companies arrival
 Low purchasing power of people

14.  Reduce price of products
 Reduce distribution cost
 Increase production capacity
 Increase market
 Install more power plants