The country''''s equity market is witnessing 64th initial public offering (IPO) to the general public since 2000 with Habib Bank''''s biggest IPO in terms of value of Rs 12.2 billion. The government has offered 51.75 million HBL shares, including green-shoe option.
Which may extend to over 517,500 applicants of minimum lot size of 100 shares allowed by the Privatisation Commission (PC). Previously, in 2005, the PC had offered UBL shares through IPO.
"We believe that HBL IPO should be over-subscribed in terms of value. However, in terms of minimum-lot applications, there is a question mark", Haris Dagia, an analyst at JS Global Capital Limited, said.
Before the current offer there have been 63 IPOs in the country''''s equity market, through which Rs 40.3 billion equity capital was raised during last seven years since 2000. These included 49 companies and 14 closed-end mutual funds and Modarabas. Total amount received was Rs 141.6 billion against Rs 40.3 billion meant to be raised from these IPOs, which was 3.51 times oversubscribed.
The year 2005 got the highest number of new listings, as 17 IPOs took place in this year by rising Rs 9.2 billion to Rs 35.6 billion received from investors. As many as 14 IPOs took place in 2004, through which Rs 19.7 billion were raised against the received amount of Rs 79.0 billion.
In 2007 to date, Rs 6.1 billion has been raised, as against Rs 11.2 billion received from the investors through 11 IPOs. In 2005, 3.89 times over-subscription of the IPO offered amount was mainly due to the tremendous investor response to IPOs of Attock Petroleum Limited (APL) and Kot Addu Power Company Limited (Kapco).
These IPOs received Rs 10.7 billion and Rs 20.8 billion, as against the offered amount of Rs 0.58 billion and Rs 2.6 billion, were thus oversubscribed by 18.61 and 7.89 times, respectively.
The Kapco was the most popular IPO among small investors. The peculiarity of IPO was that it received the highest number of applications (1.39 million) in the category of smallest lot of 500 shares, as against the required 176,050 such applications for 88 million shares.
In the top 10 oversubscribed IPOs as per value, APL was at the top which received Rs 10,749 million against an offered amount of Rs 578 million, Bank Al Falah received Rs 11,801 million against Rs 1,200 million, NBP received Rs 1,222 million against Rs 131 million, PICT received Rs 1,341 million against Rs 160 million, Kapco received Rs 20,841 million against Rs 2,641 million, BankIslami Pakistan received Rs 3,103 million against Rs 400 million, Sui Southern Gas Company received Rs 10,897 million against Rs 1,745 million, Sitara Paroxide received Rs 1,429 million against Rs 250 million, TRG Pakistan received 1,122 million against Rs 200 million, while Pakistan Capital Market Fund received Rs 2,030 against offered amount of Rs 375 million.
Based on the over-subscription in terms of applications in the minimum lot size, APL dominated all other IPOs and was oversubscribed by 18.48 times. It was followed by Bank Al Falah, Kapco and BankIslami Pakistan, which were oversubscribed by 9.34 and 7.37 times the offered shares, respectively.
The top 10 oversubscribed IPOs in term of applications in minimum lot size were APL 369,626 applications against 20,000 offered applications, Bank Al Falah 747,483 applications against 80,0000, Kapco 1,389,405 applications against 176,050, BankIslami Pakistan 589,791 applications against 80,000, Siddiqsons TinPlate 48,582 applications against 8,158, Sitara Paroxide 267,620 applications against 50,000, Arif Habib Limited 12,999 applications against 2,500, Bank of Khyber 408,709 applications against 82,200, JS Capital Limited 23,547 applications against 5,000 and Pakistan Petroleum 751,437 applications against 205,751.
The government offloaded its equity stake in OGDC to the general public in 2004. In that IPO, the government received Rs 28.0 billion, as against the offered Rs 6.9 billion. OGDC was followed by Kapco, PPL and BAFL. Their IPOs received Rs 20.8 billion, Rs 20.7 billion and Rs 11.8 billion respectively.