SECP extends PSX bookbuilding by one day for initial public offering

KARACHI: The Securities and Exchange Commission of Pakistan (SECP) has extended the bookbuilding process of debut IPO of Pakistan stock exchange (PSX) by one day beyond the original deadline of June 7.

“All concerned are hereby informed that the Securities and Exchange Commission of Pakistan has allowed extension in time for the book building for offer for sale of shares of the Pakistan Stock Exchange Limited for one day i.e. upto Thursday, June 8, 2017,” the PSX said in a notice. “Accordingly the eligible investors can now register until 3:00 pm and can bid until 5:00 pm on Thursday, June 8, 2017.”

So far, the IPO of the country’s integrated bourse has received a very dismal response as bids for just over 45 percent of the offered shares were received in two days. Although, the exact number of bids could not be known, officials involved in the process said bids for approximately 77 million shares had been received so far.

The shares of PSX are being offered to high net-worth individuals, institutional investors and the retail investors at a floor price of Rs.28/share. The quantum of public offering is 160 million shares.

The entire issue is being offered via book building process. However, the 25 percent of the offer size i.e. 40.074 million shares will be offered to the retail Investors at the strike price determined through the book building mechanism and any shares that remain unsubscribed by the general public shall be allocated at pro-rata, to successful investors as per the book building process.

Sources said the bids received on the first day did not suggest that there would be any appreciation in the value of shares compared with the floor price of Rs28/share. However, officials are still confident that the strike price would be somewhere between Rs30/share to Rs31/share. 

In December last year, PSX sold 40 percent strategic shares to a Chinese-led investors group that made the highest bid of Rs28/share for 320 million offered shares. The transaction value was calculated at around $85 million.

The consortium comprises of three Chinese exchanges — China Financial Futures Exchange Company Limited (lead bidder), Shanghai Stock Exchange and Shenzhen Stock Exchange. Together they acquired 30 percent of the strategic stock, while two local financial institutions, namely Pak-China Investment Company Limited and Habib Bank Limited acquired five percent stake each.   The bourse acquisition is first of its kind in the regional market, while Chinese bourses stroke the maiden deal outside China.