IPAK to tap market for Rs1.47bn in expansion-focused IPO

KARACHI: International Packaging Films Limited (IPAK) on Friday announced its intention to raise Rs1.47 billion through an Initial Public Offering (IPO), issuing 70.1 million shares to the public, representing 10.01 percent of its post-IPO paid-up capital at a floor price of Rs21.00 per share.

The book building dates are scheduled for 8th and 9th May. The company plans to utilise the proceeds for the early repayment of a long-term loan acquired to fund expansion projects, particularly the establishment of manufacturing facilities for Biaxially Oriented Polypropylene (BOPP) and Biaxially Oriented Polyethylene Terephthalate (BOPET) films.

IPAK, along with its subsidiaries - Cast Packaging Films (CPAK), Petpak Films (PETPAK), and Global Packaging Films (GPAK) - forms the largest manufacturing group of flexible packaging films in Pakistan. The group collectively offers a diverse portfolio of packaging solutions, producing BOPP, CPP, and BOPET films.

The IPO will follow a 100 percent book-building process, with successful bidders allocated 75 percent of shares and the remaining 25 percent offered to retail investors. IPAK recorded net sales of Rs19.9 billion in 2023, with a gross margin of 27 percent and a profit before tax of Rs2.9 billion. Its net profit after tax for 2023 stood at Rs1.6 billion, with a 3-year revenue Compound Annual Growth Rate (CAGR) of 41 percent.

Besides meeting local demand, IPAK exports its products to various regions including North America, Europe, Africa, and the Middle East, contributing to foreign exchange earnings for Pakistan. CEO of IPAK Group, Naveed Godil, anticipates foreign exchange earnings of $15 to $20 million in the fiscal year 2024/25 through exports.

CEO IPAK Group, Naveed Godil said his company is expected to earn $15-20 million of foreign exchange through exports in year 2024/25.

Shahid Ali Habib, CEO of Arif Habib Ltd, said IPAK as an enticing investment opportunity, highlighting its position as Pakistan's largest manufacturer of flexible packaging films with a 3-year revenue CAGR of 41percent and favourable forward Price-to-Earnings (PE) and Price-to-Book (PB) multiples of 4.2x and 0.8x respectively.

Arif Habib Limited and AKD Securities Limited have been mandated by IPAK to act as Mandated Lead Manager and Joint Lead Manager, respectively, for the IPO. Established in 2015, IPAK commenced operations with a state-of-the-art BOPP production line acquired from Bruckner Maschinenbau (Germany).

Established in 2015, IPAK initiated as a green field project to manufacture Biaxially Oriented Polypropylene films through its state-of-the-art 8700mm Co-Extruded BOPP production line acquired from Bruckner Maschinenbau (Germany).