The IPO market in Pakistan has seen a remarkable revival in 2024, as the Pakistan Stock Exchange (PSX) witnessed five IPOs raising over Rs8 billion in the ongoing year, said Arif Habib Limited (AHL), a brokerage house, in its report on Saturday.
The figures are a stark contrast from 2023, where PSX saw just one IPO, with a meager Rs435 million of funds raised. 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.
The current IPO market resurgence comes on the back of an “improved economic landscape and a tremendous performance by the stock,” the brokerage house said.
AHL was of the view that positive economic indicators including downward inflation trajectory, monetary easing, and stable currency alongside the successful negotiation of the International Monetary Fund’s (IMF) Extended Funding Facility amounting $7 billion “have created an attractive environment for equity offerings, drawing investor interest and facilitating robust capital raising activities on the PSX.”
Pakistan’s stock market has been on a record-breaking spree in recent weeks, with the benchmark KSE-100 Index settling just shy of the landmark 90,000 level at 89,993.97 level on Friday.
During the ongoing year, the benchmark index has surged by 42.4%, “reflecting an overall positive sentiment and renewed investor interest,” said AHL. Moreover, the KSE-100 index profitability has increased by 24.4% during FY24 to a historic high level of Rs1.6 trillion, it noted.
“The positive momentum in the stock market has encouraged companies to tap into public equity markets.”
In 2024, the PSX main board welcomed new listings including Secure Logistics, which raised Rs600 million, TPL REIT Fund-I (Rs589 million), International Packaging (Rs1,767 million), Fast Cables (Rs3,130 million) and BF Biosciences (Rs1,925 million), raising Rs8,010 million.
Meanwhile, Mughal Energy and Burj Clean Energy have been added to the GEM board, said AHL.
“Capital raised via IPOs this year reached its highest since 2021, underscoring a strong appetite for new investment opportunities in the market,” the brokerage house noted.
Apart from IPOs, 10 companies issued right shares, raising Rs18.35 billion, “showcasing a consistent demand for capital expansion across various sectors,” said AHL.