Pakistan’s Secure Logistics Group Ltd (SLG) is planning an initial public offering (IPO) ) at the Pakistan Stock Exchange (PSX), aiming to raise at least Rs750 million ($2.7 million), reported Bloomberg on Friday.
As per the report, the Islamabad-based company, which offers solutions specialising in logistics and vehicle fleet management services across the country, plans to sell about 63 million shares in the first quarter of this year, according to Shahid Ali Habib, chief executive officer at Arif Habib Limited (AHL).
The brokerage house is the sole financial adviser and bookrunner for the deal.
“The proceeds will primarily be used to reduce the company’s debt,” he was quoted as saying.
As per Bloomberg, Secure Logistics will become Pakistan’s first listed logistics company once the share sale is completed.
The company has a total of 283 transport vehicles, said Habib. “The company’s revenue is projected to increase to Rs2.1 billion in 2023 and grow by another 28% in 2024,” said Habib.
Going public could provide a cheaper funding route for companies in the South Asian country, where the key policy rate stands at a record 22%.
Back in 2022, SLG, in a notice to the PSX, had said that it aims to Rs1.5 billion through an IPO.
The company back then said that it would utilise the funds generated from the IPO to expand operations. However, the company did not pursue the IPO channel back then.
Meanwhile, the latest development comes after the Pakistan Stock Exchange (PSX) enjoyed a remarkable 2023, with the benchmark KSE-100 hitting new peaks and emerging as the best-performing asset class in the country, delivering a return of nearly 55% in the 12 months (in rupee terms).
The recovery came on the back of a last-minute deal between Pakistan and the International Monetary Fund (IMF) clinched in June last year, as the two parties reached an agreement on policies to be supported by a $3-billion, nine-month Stand-By Arrangement (SBA).
However, despite the record show – which made the KSE-100 the world’s top-performing index in the second half of 2023 – IPOs were a difficult thing to come by. The market saw just one IPO i.e. Symmetry Group which managed to raise a meagre Rs435 million funds.
This was the lowest amount raised in a year in the past decade and half of the previous record low of Rs800 million seen in 2013.
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