Barkat Frisian Agro IPO oversubscribed by 16.2 times

KARACHI: The book-building process of Barkat Frisian Agro Limited’s (a joint venture between the Netherlands-based Frisian Egg Group and Pakistan’s Buksh Group) initial public offering (IPO) has concluded with an oversubscription of 16.25 times, a historic development at the Pakistan Stock Exchange (PSX).

The IPO received an unbelievably overwhelming response from institutional investors and high-net worth individuals as the strike price clocked in at Rs18.2 per share, a max 40 per cent higher than the floor price of Rs13.

BFAL has raised Rs1.23 billion in total, making it the first pasteurised egg company IPO in the PSX. Several brokerages had issued almost unanimous calls to ‘subscribe’, which resulted in investor demand amounting to Rs14.25 billion against the IPO’s book-building size of Rs1.23 billion.

The successful bidders will be provisionally allotted only 75 per cent of the issue size, ie, 50,801,250 shares, and the company will offer the remaining 25 per cent or 16,933,750 shares to retail investors through the general public subscription on February 24 and 25.

Arif Habib Limited is the lead manager and book runner for the IPO. The fund raised from equity investors will be used for building a new state-of-the-art production facility at the Special Economic Zone of Faisalabad.

The company is currently operating a manufacturing plant in Pakistan’s commercial capital Karachi, and the new plant will increase its pasteurised eggs’ production capacity by 71 per cent to 29,000 tonnes per year from the existing 17,000 tonnes.