SLG’s Rs 600m IPO marks PSX debut in 2024

KARACHI:

Secure Logistics Group (SLG) successfully attracted a price of Rs 12 per share in the two-day Dutch offering, raising Rs 600 million by selling 50 million shares on the Pakistan Stock Exchange (PSX) in this week’s auction.

The initial public offering (IPO) by the first logistics company on the PSX was oversubscribed, with buy orders for 50.69 million shares from investors against the 50 million shares on offer.

The company stated in its pre-IPO prospectus that the primary objectives of raising equity capital are to deleverage the balance sheet in a challenging high-interest rate environment, advance the company’s technology infrastructure to complete the Tech-Pivot initiative, expand to regional markets. and improve fleet-related efficiency.

The shares were offered at a minimum price of Rs 12 per share, with an option to increase by 40% to Rs 16.80 per share during the auction and book building process.

This marks the first company listed on the PSX in 2024, completing a seven-month period without an IPO on the stock exchange. The last IPO took place in August 2023.

SLG aims to establish itself as a ‘Regional Player’ by establishing linkages with Central Asian markets, leveraging the strategic advantages offered by the proximity of seaports to Pakistan, the prospectus said. In addition, it plans to increase its current fleet by adding at least five delivery vehicles, which are partially financed through the equity capital raised in PSX.

The pre-IPO capital raising was Rs 585 million, led by existing institutional shareholders namely Saudi Bugshan Group and Karandaaz Pakistan, translating to a total capital raising of Rs 1.19 billion.

A brief press statement noted heavy participation from institutional and high net worth private investors during the two-day book-building process. Institutional investors accounted for 76% of participation, while the remaining 24% of bids came from private high net worth investors. However, the company will issue 75% of the 50 million shares to successful bidders, with the remaining 25% available to retail investors at a strike price of Rs 12 per share later.

Published in The Express Tribune, March 30^u2024.

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