PHOTO: AFP
“It is oversubscribed,” the lead book-runner Arif Habib Limited Chief Executive Officer Shahid Ali Habib told The Express Tribune.
The over-subscription was achieved after PSX extended the book-building (Dutch bidding) process three times - one-day each time.
“We have received bids for over 162 million shares against the target of 160.29 million shares on sale,” he said.Originally, the book-building process was to be carried out for two days (June 6 and 7). However, due to under-subscription, the PSX agreed to keep extending the process, which was completed on Monday.
The extensions were announced with the approval of the apex regulator, the Securities and Exchange Commission of Pakistan.
In the process, under which bids were invited from high net-worth individual and institutional investors, the strike price was determined at Rs28 per share, which was the opening bid.
The opening bid was the price at which PSX divested its 40% stake (320 million shares) to a Chinese consortium through competitive bidding in December 2016.
Out of a total of 160.29 million shares (20% stake), PSX would offer 120.22 million shares (75%) to high net-worth individual and institutional investors at the strike price.
The allocation of shares to the investors would be made on first-come-first-serve basis.
Offer to retail investors
PSX would offer the remaining 40.074 million shares (25%) to retail investors at the same strike price of Rs28 per share on Tuesday.
In case, retail investors undersubscribe the shares, the remaining would be offered to the high net-worth individual and institutional investors who surface on the waiting list.
“PSX shares would get listed at its own trading platform on June 23 or 30,” Habib added.
The listing would culminate the process of PSX corporatisation, demutualisation and integration.
Earlier in January 2016, three local stock exchanges namely Karachi Stock Exchange (KSE), Lahore Stock Exchange and Islamabad Stock Exchange were integrated under the new name Pakistan Stock Exchange.
Originally, 200 brokers of the former Karachi Stock Exchange (now PSX) were the owners of the PSX.
Earnings from the divestment would go to these brokers only.
The divestment has now segregated PSX management from the brokers’ community, which is an international practice to keep the management away from brokers’ influence and let the stock market run independently.
Published in The Express Tribune, June 13th, 2017.
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