Pakistan has a chance to grab the Indian share of Basmati rice in global markets, said a company official. PHOTO: FILE
KARACHI: Matco Foods Limited, one of the basmati rice exporters in Pakistan, is targeting to raise close to Rs758 million through an Initial Public Offering (IPO) that would be held towards the end of the current month.
It intends to issue 25% of its shares to public and high net-worth individuals.
Through the IPO, the company is going to issue approximately 29 million shares at a floor price of Rs26 per share.
The company is going to invest the capital in its two rice glucose plants at Port Qasim in Karachi. Glucose is the main ingredient for pharmaceutical, confectionery and juice industries.
The company is going to offer an issue size of 29,143,000 ordinary shares representing 25% of the total post-IPO paid-up capital of the company, Matco Foods Pvt Limited Director Faizan Ali Ghori told a group of journalists visiting the newly-installed plant with the help of a Chinese company. The transaction size of the IPO is going to be Rs757,718,000.
The issue is being made through the book-building process on January 23 and 24. Successful bidders will be allowed to make bids for an allocation of 75% shares while the remaining 25% shall be offered to retail investors. In case the retail portion remains unsubscribed, its share will be allotted to the successful bidders on pro rata basis, he said.
The company will utilise the proceeds raised from the IPO to finance the expansion of its rice glucose/syrup and rice protein plant. Matco exports 75% of its production, since it prefers international markets where glucose is priced at $11,000 per ton against a price range of just $400-500 per ton in the local market, said Ghori.
“There are only two rice glucose factories in Pakistan. The organised sector of consumer goods is growing here and this phenomenon has a great impact on our product so we want to take advantage through value addition,” he added.
At present, domestic demand of glucose in Pakistan is being met 90% by corn glucose, which contains gluten.
Meanwhile, Pakistan has a good chance to grab the Indian share of Basmati rice in global markets. The European Union (EU) has made stringent policies against hazardous pesticides used to grow rice crop by Indian farmers, and this could go in Pakistan’s favour.
The EU has stopped accepting more than 0.01mg per kg of a pesticide called tricyclazole, from the January 2018. Up till now, the EU was accepting 0.03mg per kg from different countries, including India. “India could overcome the crisis in three years so we have this time period to grab the international market through value-added and quality service.”
Published in The Express Tribune, January 14th, 2018.
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