Only 3 IPOs in 2022: Rs1.3bn raised by PSX lowest amount in 9 years

KARACHI: Pakistan capital market saw just three (3) Initial Public Offerings (IPOs) in 2022 thus far with a total amount raised stands at Rs 1.3 billion.

This is the lowest amount in 9 years. IPOs raised Rs 0.8 billion in 2013. The numbers of IPOs are also lowest after 2019 when PSX saw just one IPO.

This is in sheer contrast to last year where PSX saw 8 offerings with a total amount raised to the tune of Rs 20 billion. “We attribute this to market underperformance and political and economic instability,” Topline Securities research report said.

In 2022 year-to-date, the benchmark KSE-100 Index is down 11 percent in PKR terms and 30 percent in US$ terms, the report said, adding that average traded daily volume and value are also down 52 percent and 60 percent to 231 million shares and Rs 07 billion, respectively.

Globally, a similar trend has also been seen where IPOs have dried up. As per Ernst and Young (E&Y), a total of 992 IPOs were witnessed in 2022 raising $146 billion by the end of third quarter 2022, which was down by 57 percent on year-on-year basis. This is attributed to rising macro challenges, market uncertainty, and falling global equity prices.

Out of the three listings at PSX, Adamjee Life Assurance (ALIFE) and Global REIT (GRR) was on main board whereas Supernet (GEMSPNL) was on GEM board.

ALIFE: ALIFE is a subsidiary of Adamjee Insurance (AICL), which is owned and operated by Mansha Group. The company is into Life Insurance Business. Company offered 25 million shares at a strike price of Rs 28, raising Rs 700 million in March, 2022.

GEMSPNL: GEMSPNL is a subsidiary of Telecard Limited. The company is engaged in providing Information and Communication Technology Services. The company offered 21.1 million shares at strike price of Rs 22.5, raising Rs 475 million in April, 2022.

GRR: Globe Residency REIT is a closed end development REIT. The company offered 14 million shares to investors at fixed price of Rs 10/unit raising Rs 140 million.

For this analysis, the report excluded Hussain Sugar Preference Shares and GCIL (merger with GTECH).

Copyright Business Recorder, 2022