Secure Logistics Group (SLG) successfully attracted a price of Rs12 per share in the two-day Dutch bidding, raising Rs600 million by selling 50 million shares at the Pakistan Stock Exchange (PSX) in this week’s auction.
The initial public offering (IPO) by the first-ever logistics company on the PSX was oversubscribed, with purchase orders for 50.69 million shares from investors against the 50 million shares offered.
The company stated in its pre-IPO prospectus that the primary goals of raising equity capital are 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.
Shares were offered at a minimum price of Rs12 per share, with the potential to increase by 40% to Rs16.80 per share during the auction and book-building process.
This marks the first company listed on the PSX in 2024, ending a seven-month period with no IPOs at the exchange. The last IPO was held 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. Additionally, it plans to augment its current fleet by adding a minimum of five distribution vehicles, partially funded through the equity raised at the PSX.
The pre-IPO capital raise was Rs585 million, led by existing institutional shareholders, namely, Saudi Bugshan Group and Karandaaz Pakistan, translating into a total capital raise of Rs1.19 billion.
A brief press statement noted strong participation from institutional and high-net-worth individual investors during the two-day book-building process. Institutional investors accounted for 76% of participation, while the remaining 24% of bids came from high-net-worth individual investors. However, the company will issue 75% of the 50 million shares to successful bidders, with the remaining 25% allocated to retail investors at the strike price of Rs12 per share later on.
Published in The Express Tribune, March 30th, 2024.
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