The Pakistan Stock Exchange (PSX) is gearing up to host its inaugural company of 2024 on its trading platform this week. Secure Logistics Group (SLG), the pioneering logistics entity to be listed at the national bourse, is slated to offer 50 million shares at a minimum (floor price) of Rs12 per share. The objective is to raise a minimum of Rs600 million through the book-building process, following the stabilisation of the volatile political and economic landscape post-February general elections and the recent achievement of an International Monetary Fund (IMF) staff-level agreement.
The company’s prospectus, available on the PSX website, articulates its primary goals for raising equity capital: to deleverage the balance sheet in a challenging high-interest rate environment, advance the company’s technological infrastructure to complete the Tech-Pivot initiative, expand into regional markets, and enhance fleet-related efficiencies.
According to existing laws, the share price can increase by a maximum of 40% to Rs16.80 per share from the floor during the two-day bidding, potentially attracting up to Rs840 million.
This Initial Public Offering (IPO) marks the first public offering in the past seven months, with the last one occurring in August 2023.
“SLG aims to establish itself as a ‘Regional Player’ by forging connections with Central Asian markets, leveraging the strategic advantages offered by the proximity of sea ports in Pakistan,” as stated in the prospectus.
The company intends to develop an integrated technology platform to optimise the efficiency of its ‘in-house’ operational assets. This platform will facilitate real-time reservation of transportation assets, allocation of warehousing space, tracking of cargoes, and invoicing.
Furthermore, the company plans to augment its current fleet by adding a minimum of five distribution vehicles (110/120 HP), partially funded through the equity raised at PSX.
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Arif Habib Limited (AHL) serves as the exclusive financial adviser and book-runner for the IPO.
The company plans to offer 100% (50 million shares) to institutional investors and high-net-worth individuals during the book-building process. This phase will determine a strike price, with 75% of the 50 million shares allocated to major investors. The remaining 25% will be offered to retail investors at the strike price subsequently.
The Express Tribune learnt that SLG is an integrated logistics company with three distinct yet complementary business lines: logistics, asset tracking, and security services. With a nationwide presence, the company serves nearly 125 corporate clients across all three sectors.
Additionally, it has been reported that the company secured Pre-IPO equity of Rs585 million from strategic investors Saudi Bugshan and Karandaaz Pakistan.
The company reported an earnings per share of Rs2.28 for the calendar year 2023, resulting in a price-to-earnings ratio of 5.39 at a floor price of Rs12 per share.
SLG, headquartered in Islamabad, specialises in providing logistics and vehicle fleet management services in Pakistan. Following the IPO, SLG is poised to become the first logistics-listed company in the country, according to sources.
Currently managing a fleet of 283 vehicles, SLG anticipates its revenue to reach Rs2.1 billion in 2023, with an expected 28% growth in 2024, as stated by the AHL CEO.
SLG had initially planned the IPO for 2022, aiming to raise Rs1.5 billion. However, this plan was put on hold temporarily due to political and economic uncertainties, which could have affected the accurate pricing of stocks through a Dutch auction.
The last IPO at PSX occurred approximately five months ago when Symmetry Group went public in early August 2023. It was the sole IPO of the preceding year, characterised by heightened political and economic crises.
Published in The Express Tribune, March 26th, 2024.
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