The IPO market in Pakistan has witnessed a significant recovery during the year 2024, supported by an improved economic landscape and tremendous stock market performance.

According to a report by Arif Habib Limited, key macroeconomic parameters including a downward inflation trajectory, monetary easing and a stable currency, as well as the successful negotiation of the IMF Extended Financing Facility amounting to 7 billion, has created an attractive environment for equity offerings, attracting investor interest and facilitating robust capital raising activities on the Pakistan Stock Exchange (PSX).

The KSE-100 index surged 42.4% over the course of 2024, reflecting overall positive sentiment and renewed investor interest. Furthermore, the profitability of the KSE-100 index soared by 24.4% in FY24 to reach an all-time high level of Rs. 1.6 trillion.

Positive stock market dynamics have encouraged companies to tap public stock markets. A total of five (5) IPO transactions and two (2) were completed in 2024, compared to just one (1) transaction last year.

In 2024, the main board welcomed new listings including Secure Logistics (SLGL), TPL REIT Fund-I (TPLRF1), International Packaging (IPAK), Fast Cables (FCL) and BF Biosciences (BFBIO). Meanwhile, Mughal Energy (GEMMEL) and Burj Clean Energy (GEMBCEM) have been added to the GEM board.

Capital raised via IPOs this year reached its highest level since CY21, highlighting a strong appetite for new investment opportunities in the market.

Total demand for IPOs in 2024 stood at Rs. 13.0 billion, with Rs. 8.4 billion raised, representing an oversubscription of 1.6x.

In addition to the IPOs, 10 companies issued the right shares, raising Rs. 18.3 billion, reflecting continued demand for capital expansion in various sectors. During 2024, four companies were listed on the PSX through merger, compared to three companies last year. The four companies are 1) Stylers International, 2) LSE Capital, 3) UDL International and 4) Big Bird Foods.

Initial public offering (IPO) of shares during the year 2024

• Secure Logistics Group Ltd.: Secure Logistics Group Ltd, formerly known as Asia Capital Partners (Pvt.) Limited, was established in 2013 and serves as the holding company for four wholly owned operating subsidiaries: 1) SecurLog (Pvt.) Limited, 2 ) Secure Track (Pvt.) Limited, 3) Fist Security (Pvt.) Limited and 4) TDM (Pvt.) Limited. These subsidiaries are respectively engaged in logistics, vehicle fleet management, security services and commodity trading/indentation.

In August 2016, Asia Capital Partners (Pvt.) Ltd. was renamed Secure Logistics Group Limited. The company has transformed into an integrated provider of logistics, asset monitoring, tracking and security services, leveraging a unique set of horizontal synergies. There are notable synergies between logistics and vehicle tracking operations, while security services also strengthen the vehicle tracking and logistics sectors.

• International Packaging Films Ltd.: The company specializes in the production of biaxially oriented polypropylene (BOPP) films. In 2017, IPAK acquired a production line with an annual capacity of 41,360 tons, producing films of different qualities and thicknesses.

IPAK started manufacturing five-layer films in September 2017, with Tri-pack as its main competitor. To expand its product range, IPAK launched Cast Packaging Films (Private) Limited (CPAK) for the production of CPP films, which started operations in 2021 with a capacity of 9,900 tonnes per annum. Additionally, IPAK establishes PETPAK Films (Private) Limited, which focuses on the production of BOPET films, with a capacity of 41,920 tons per year, which started operations in February 2024.

• Fast Cables Ltd. (FCL): Fast Cables is a manufacturer of electrical cables and conductors in Pakistan. With an annual production capacity of 8,400 tonnes of copper and 13,800 tonnes of aluminum products, the company operates two plants in Lahore.

Fast Cables uses technologies such as a catenary continuous vulcanization (CCV) line and an aluminum alloy plant to produce durable products such as all-aluminum alloy overhead cables and conductors.

The company’s products have been approved by reputable local laboratories and institutions and offer a wide range of cables, including low and medium voltage options. Additionally, it pioneered the production of Greeley conductors and received type testing certification from VEIKI-VNL in Hungary.

• BF Biosciences Ltd. (BFBIO): BF Biosciences Limited is a joint venture between Ferozsons Laboratories Limited and the Argentinian Bagó Group, incorporated in 2006. The company operates in the pharmaceutical industry and focuses on the importation, manufacturing, marketing and distribution of biotechnology products. BFBIO is a pioneer in biotechnology manufacturing in Pakistan, producing life-saving medicines for diseases such as cancer, chronic kidney disease and hepatitis C.

The company’s factory in Lahore has been operational since 2009 and comprises two manufacturing lines. Line I, created in 2009, focuses on the production of low-volume biological products, particularly for hepatology. In 2024, BF Biosciences expanded its capabilities with Line II, which includes cutting-edge technology for biological and non-biological products, including vaccines. This expansion allows the company to effectively meet the growing market demand in both segments.

In CY24, Rs. 8.6 billion was raised through debt instruments, compared to Rs. 31.2 billion in CY23.

1. JS Bank Limited – Level II: JS Bank Ltd (JSBL) has issued a TFC of Rs. 3.5 billion. The objective of this instrument was to contribute to the Tier II capital of JSBL to comply with the capital adequacy ratio requirement prescribed by the SBP. The duration of the instrument is 10 years and carries a profit rate of 3 million KIBOR + 200 basis points.
2. BankIslami Pakistan Limited – Ehad Sukuk II: BIPL has issued a SUKUK in denominations of Rs. 5,000, offering a profit rate equal to the base rate plus a maximum margin of 2.50 percent. The issue size was Rs. 1,000 million and the issue proceeds will contribute to the issuer’s additional Tier I capital for the CAR as per the guidelines laid down by the SBP. The funds thus raised will be used in the financing and investment activities of the Bank (general pool), as permitted by its statutes.
3. TPL Properties Ltd.: TPLP has issued, secured, privately placed, a medium-term financing certificate, in the amount of Rs. 1,575 million, to finance the company’s working capital needs and the settlement of short-term borrowings of the company. The duration was 12 months and the profit rate was 3M KIBOR + 200 basis points. The profit will be paid on a quarterly basis and TFC will ultimately be redeemed at the end of the term.
4. Kashf Foundation: Kashf Foundation has issued Pakistan’s first gender bond amounting to Rs. 2,483 million, offering a profit rate of 3 million KIBOR plus 1.50 percent per annum. The focus of the issue is infrastructure micro-financing loans aimed at women’s welfare through entrepreneurship, business support, flood rehabilitation, education and house rehabilitation. Arif Habib Limited and Bank of Punjab were the lead advisors and arrangers.

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