Loads Limited IPO: Book-building process results in strike price of Rs34
Leading auto parts maker is offering 50 million shares in a two-phase IPO
Leading auto parts maker is offering 50 million shares in a two-phase IPO. PHOTO: AFP
KARACHI:
The book-building process of the Initial Public Offering (IPO) of Loads Limited - one of the leading auto parts makers in Pakistan - has resulted in a strike price of Rs34 per share on Wednesday.
The company is offering 50 million shares (making up 40% of post IPO outstanding shares of 125 million) in the two-phase IPO.
In the first phase of the book-building process, the company offered 35.62 million shares to high net-worth individuals and institutional clients. The bidding process was oversubscribed by 3.5 times.
In the second phase, the remaining 14.35 million shares will be offered to the general public on September 28th-29th at the strike price of Rs34 per share. Out of the remaining 14.35 million, the company will first offer 2.5 million shares to its employees at the same strike price. In case they do not buy, the company will also offer the same to the general public.
At Rs34 per share, the company has raised Rs1.21 billion against a target of Rs534 million. “The overall outlook of the automobile sector remains positive in Pakistan. We believe the company will perform well in the near future,” JS Research analyst Faizan Ahmed told The Express Tribune.
“Looking at the recent IPOs in which people have shown overwhelming interest, the oversubscription of Loads Limited on Wednesday does not surprise us,” he added.
Loads Limited is Pakistan’s premier radiator and exhaust systems manufacturer. Maintaining dominance in the exhaust systems and radiators market, the company plans on using proceeds from the listing to fund a significant expansion plan of Rs550 million with excess funds to be provisioned for working capital.
The company makes radiators, exhaust systems, muffler, sheet metal components and heater core and its clients include Pak Suzuki, Indus Motor and Honda Atlas Cars in the passenger cars segment.
Moreover, it also caters to Hinopak Motors, Master and Fuso motors in the heavy commercial vehicles (HCV) and light commercial vehicles (LCV) segment, while Yamaha (motorbikes) and MTL (tractors) make up the company’s diversified client base.
Loads maintains dominance in the exhaust systems and radiators market with estimated market shares of 95% in exhaust systems and 40% for radiators for cars overall, while making up 20%-35% market share in sheet metal components and radiator cores.
The Auto Industry Development Programme (AIDP-II) and China-Pakistan Economic Corridor (CPEC) are touted as major external propellants of demand growth in the automobile industry. The demand for HCVs and LCVs segments are expected to improve from burgeoning infrastructure spending and additional entrants to the local automotive industry bolster supply for products produced by Loads, according to an AKD Research report.
Published in The Express Tribune, September 8th, 2016.
The book-building process of the Initial Public Offering (IPO) of Loads Limited - one of the leading auto parts makers in Pakistan - has resulted in a strike price of Rs34 per share on Wednesday.
The company is offering 50 million shares (making up 40% of post IPO outstanding shares of 125 million) in the two-phase IPO.
In the first phase of the book-building process, the company offered 35.62 million shares to high net-worth individuals and institutional clients. The bidding process was oversubscribed by 3.5 times.
In the second phase, the remaining 14.35 million shares will be offered to the general public on September 28th-29th at the strike price of Rs34 per share. Out of the remaining 14.35 million, the company will first offer 2.5 million shares to its employees at the same strike price. In case they do not buy, the company will also offer the same to the general public.
At Rs34 per share, the company has raised Rs1.21 billion against a target of Rs534 million. “The overall outlook of the automobile sector remains positive in Pakistan. We believe the company will perform well in the near future,” JS Research analyst Faizan Ahmed told The Express Tribune.
“Looking at the recent IPOs in which people have shown overwhelming interest, the oversubscription of Loads Limited on Wednesday does not surprise us,” he added.
Loads Limited is Pakistan’s premier radiator and exhaust systems manufacturer. Maintaining dominance in the exhaust systems and radiators market, the company plans on using proceeds from the listing to fund a significant expansion plan of Rs550 million with excess funds to be provisioned for working capital.
The company makes radiators, exhaust systems, muffler, sheet metal components and heater core and its clients include Pak Suzuki, Indus Motor and Honda Atlas Cars in the passenger cars segment.
Moreover, it also caters to Hinopak Motors, Master and Fuso motors in the heavy commercial vehicles (HCV) and light commercial vehicles (LCV) segment, while Yamaha (motorbikes) and MTL (tractors) make up the company’s diversified client base.
Loads maintains dominance in the exhaust systems and radiators market with estimated market shares of 95% in exhaust systems and 40% for radiators for cars overall, while making up 20%-35% market share in sheet metal components and radiator cores.
The Auto Industry Development Programme (AIDP-II) and China-Pakistan Economic Corridor (CPEC) are touted as major external propellants of demand growth in the automobile industry. The demand for HCVs and LCVs segments are expected to improve from burgeoning infrastructure spending and additional entrants to the local automotive industry bolster supply for products produced by Loads, according to an AKD Research report.
Published in The Express Tribune, September 8th, 2016.