The Securities and Exchange Commission of Pakistan (SECP) has approved the application of M/s Organic Meat Company Limited to issue, circulate and publish the prospectus for initial public offering (IPO) of company's shares in the stock exchange.

Sources told Business Recorder here on Thursday that the company would have 60 days to publish the details of proposed offering in the prospectus and offers its shares to the public from the date of approval.

The M/s Organic Meat Company is a halal meat processor and exporter and it intends to raise Rs720 million at floor price of Rs18 per share through the IPO.

This will be the first IPO of 2020.

In order to promote capital formation through securities market, the SECP has recently revamped its regulatory regime for IPOs.

Through amendments in IPO Regulations 2017, the eligibility criteria for listing of companies were simplified and the IPO process was made simple and cost effective to attract new listings.

The regulatory framework relies on a disclosure-based regime for IPOs. Accordingly, companies are required to make maximum disclosures pertaining to the principal purpose of the issue, risk factors, share capital, financial information, management of the issuer, legal proceedings and overdue loans in its prospectus.

This is expected to help investors better understand the offering document and make informed decisions.

The Organic Meat Company Limited (the company/issuer/organic meat) intends to issue 40,000,000 ordinary shares of face value of Rs10 each, representing 35.77 percent of the post-IPO paid up capital of the company, to the general public.

The company through Topline Securities Limited, the consultant to the issue submitted the draft prospectus for approval of the SECP under Section 87(2) read with Section 88(1) of the Securities Act, 2015 (the Act) The same has been approved by the commission.

The entire issue of 40,000,000 ordinary shares will be offered to the institutional investors and high net-worth individual investors through book building at a floor price of Rs18 per share with an upper limit of 40 percent above the floor price i.e. Rs25.2 per share (strike price may be set anywhere between Rs18 and Rs25.2 per share).

Initially, 75 percent of the issue size i.e. 30,000,000 ordinary shares will be allotted to successful bidders and remaining 25 percent of the issue size i.e. 10,000,000 ordinary shares will be offered to retail investors at the strike price.

Un-subscribed shares, if any, of the retail portion will be allotted to the successful bidders on a pro-rata basis.