Engro Fertilizers, a major subsidiary of Engro Corporation, was likely to go on with listing in the country’s stock exchanges in the next few months. According to Topline Securities, the general estimate is that the company will float close to a 100 million shares at a minimum price of Rs20.
Engro Fertilizers listing will be the second initial public offering of 2013, with the first being Lalpir Power.
However, the nature of the transaction and the stake to be offered to local and foreign investors was yet to be officially clarified.
Besides helping Engro Corporation’s cash flows, the listing will also result in unlocking Engro Fertilizers’ value for shareholders of the parent. The IPO/offer for sale is going to provide cash flow boost of close to Rs2-2.5 billion, said the report.
At the likely offer price of Rs20 per share, Engro Fertilizers’ value in Engro Corporation will be at least Rs44 per share, it said.
Published in The Express Tribune, October 8th, 2013.
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There seems to be some gaming at play as far the IPO of Engro Fertilizers is concerned. It appears that the stakeholders, that is government, banks and Engro, have all come to an agreement of sorts to supply Engro with some gas for some, so that it can generate some cash, pay of the banks, make some Urea, save government imports, and so on. So in the end, Banks bhi khush, Engro bhi khush, or government bhi khush.
For more analysis, read on.. http://inefficiencies.blogspot.com/2013/10/engro-laya-rupya.html