JS Global brings largest-ever IPO in Pakistan
August 31, 2021
KARACHI: JS Global — as the consultant and book runner of Airlink Communication Limited — has brought the largest-ever initial public offering (IPO)in Pakistan, amounting to Rs6 billion.
Airlink Communication Limited — one of the largest distributors of smartphones in Pakistan — has planned to attract investment worth Rs6 billion through the initiative.
The two-day book-building process began on August 30 and will continue till August 31.
Lead manager and consultant for the issuance of shares, JS Global, had suggested the minimum share price of Rs65, meaning investors cannot offer a buying price below this rate in the auction “with a maximum price band of up to 40%,” according to the company’s prospectus available on the PSX website.
Under the consultation of JS Global, Airlink has invited bids for 90 million shares from high net-worth individual and institutional investors under the book-building process.
The company received a bid for 45.44 million shares in a price range of Rs65-71 by the time the first day of the bidding process was completed on Monday.
The final strike price will be finalised once the bidding process is completed on Tuesday (August 31).
According to the prospectus, “IPO proceeds would be utilised for injection of working capital to expand the company’s distribution and retail network.”
Airlink aims to have 150 outlets by 2026 from 14 currently, which will boost margins together with the assembly business.
“The issue is expected to generate Rs5.85 billion at a floor (minimum) price worth Rs65 per share, out of which Rs3.90 billion (new issue of 60 million shares) shall be utilised to finance working capital requirements,” the prospectus said.
“The issuer’s total working capital requirement is Rs5.439 billion, out of which Rs3.90 billion (72% of the total working capital requirement) shall be financed by proceeds from the new issue and the remaining Rs1.539 billion (28% of the total working capital requirement) shall be financed from short-term financing facilities.”
According to a statement issued earlier, Airlink is one of the largest distributors of smartphones in Pakistan and post the announcement of the new mobile policy has put up a state-of-the-art manufacturing facility where they are manufacturing smartphones of the Transsion Group China.
Airlink has also established state-of-the-art retail stores in Pakistan and hence, became the only distributor of top international smartphone brands that is now fully vertically integrated. It is one of the largest distributors in Pakistan for Samsung, Apple, Huawei, Xiaomi, Itel, Techno, TCL and Alcatel.
The company’s sales grew from PKR 140 million in 2012 to over 47 billion in 2021 showing unprecedented growth as e-commerce and digitisation is expanding at a super pace in Pakistan where smartphones will become a necessity for everyone.
The importer and distributor of mobile phones in Pakistan had applied for listing at the Pakistan Stock Exchange (PSX) earlier in December 2020, aiming to raise a minimum of Rs5.85 billion against 90 million shares to increase its import and distribution capacity and open more outlets nationwide.
Disclaimer: Before deciding to make any investment, it is advised to first read the company's prospectus to assess potential risks and also to consult a professional investment adviser.
