Air Link raises Rs6.43b in largest private sector IPO

Book building oversubscribed by 1.64 times

KARACHI:

Air Link Communication (ALC) – a smartphone assembler and exporter in Pakistan – raised the single-largest investment worth Rs6.43 billion through selling 90 million shares to institutional and rich individual investors at the Pakistan Stock Exchange (PSX) on Tuesday.

It sold the stocks at Rs71.5 each. The company held book building process (shares’ auction) to determine the sale price at PSX on August 30-31. It opened the bidding at minimum share price at Rs65, which could go as high as 40% to Rs91 as per prevailing laws.

The book building stands a crucial part of initial public offering (IPO) which is the process by which a private company goes public by selling its stocks to general public.

“This was the single-largest, historical and record setting IPO in the private sector of Pakistan in terms of the raised equity at Rs6.43 billion,” the IPO consultant and book runner JS Global CEO Kamran Nasir said while talking to The Express Tribune.

“The company would (mostly) use the raised equity to meet working capital requirement.”

This was the seventh IPO of the year 2021 and first one in the current fiscal year 2022; started July 1.

In the previous fiscal year 2020-21, as many as eight companies raised a total of Rs20 billion through book building and initial public offering which were a 14-year high number of IPOs held during the year at PSX.

The Air Link’s IPO was oversubscribed by 1.64 times as over 500 institutional and high net worth individual investors placed bids for 147.65 million shares against an issuance size of 90 million shares, amounting the size of bids to around Rs11 billion, Nasir estimated.

The company would issue 75% of the 90 million shares to institutional and high net worth individual investors and offer remaining 25% to retail investors at the strike price of Rs71.5 on September 6-7.

The company has planned to increase the number of its retail outlets to 150 over the next five years from 14 at present, he said.

“The company sales grew from Rs40 million in 2012 to over Rs47 billion in 2021 showing an unprecedented growth as e-commerce and digitisation is expanding at a super pace in Pakistan where smart phones will become a necessity for everyone,” the brokerage house said in a commentary the other day.

The company stands as one of the largest distributors of smartphones in the country and after the announcement of new mobile policy has set up manufacturing facility where they are manufacturing smartphones of the Transsion Group China. It is one of the largest distributors in Pakistan for Samsung, Apple, Huwawei, Xiaomi, Itel, Techno, TCL and Alcatel, it added.

All the big smart phone manufacturers such as Samsung, Itel, Tencho, Infinix, TCL and Alcatel will now be assembled in Pakistan. Further Xiaomi, the largest smartphone manufacturer at world will also soon start assembling in Pakistan.

Published in The Express Tribune, September 1^st, 2021.

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