General public portion of Al Shaheer’s IPO oversubscribed

Published: August 6, 2015
6.25 million ordinary shares up for grabs. PHOTO: ATHAR KHAN/ EXPRESS

6.25 million ordinary shares up for grabs. PHOTO: ATHAR KHAN/ EXPRESS

KARACHI: The general public portion for the Initial Public Offering (IPO) of Al Shaheer Corporation has been subscribed 1.15 times, according to a statement released by the joint book runners to the issue on Wednesday.

One of the top exporters of meat, Al Shaheer Corporation is the owner of Meat One and Khass, retail chains of butcheries.

AKD Securities and Next Capital, which were IPO’s lead managers, said 5,166 share applications were received by the appointed bankers to the issue. A majority of the applications (5,021) were for 500 shares, which shows the interest of small investors in the IPO. Applications for shares could be made for 500 shares or in a multiple of 500 shares.

The IPO consisted of 25 million ordinary shares, representing 27.31% of the total post-IPO paid-up capital of the company with a face value of Rs10 per share. The first phase of the IPO, ordinarily known as the book building portion, consisted of 18.75 million shares – or 75% of the total issue – at a floor price of Rs43 per share.

An overwhelming response from institutional and high net worth individual investors resulted in the strike price of Rs95 per share. It means the general public portion of the issue, comprising 6.25 million ordinary shares – or 25% of the total issue — included a premium of Rs85 per share.

“In total, the IPO raised Rs2.375 billion for the company,” AKD Securities Head of Investment Banking Khurram Shahid told The Express Tribune.

The allocation of the shares will be made on a pro-rata basis and the specific percentage of proration will be communicated to the stock exchange in due course.

High net worth individuals had also dominated the book-building portion of the IPO, according to the breakdown of the allocation of shares. Almost 48% of the 18.75 million shares on offer during the first phase of the IPO were grabbed by rich individuals. In contrast, commercial banks, development finance institutions, leasing companies, pension funds and insurance companies showed little interest in the IPO.

Al Shaheer Corporation’s sales in terms of value and volume have grown by a four-year annualised average of 35% and 17%, respectively. The company attributes this growth to its ability to increase its presence in the export market as well as local market through its branded retail network. The company aims to utilise the proceeds of the IPO to set up its poultry business and meat processing factory .

The net profit of Al Shaheer Corporation remained Rs115 million in the first six months of the last fiscal year.

Published in The Express Tribune, August 6th, 2015.

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