AGPL all set to go public; book-building next week

KARACHI: JS Global Capital Limited has kicked off registration for the book-building of 35 million shares constituting 12.5 percent of the total paid-up capital of AGP Limited (AGPL), one of the leading local pharmaceutical companies of Pakistan, an official said on Thursday.

This is the second initial public offering of the year 2018. “The bidding for the shares, being offered at a floor price of Rs80 each, is scheduled for February 7-8, whereas public subscription will take place on February 18-16, 2018,” the official said.

“The offer is being made one-hundred-percent through book-building; however, successful bidders will be provisionally allotted only 75 percent of the offer size, i.e. 26.25 million shares and the remaining 25 percent, i.e. 8.75 million, will be offered to retail investors.”

The official continued that in case retail portion of the offer remains unsubscribed, the unsubscribed shares would be allotted to the successful bidders on pro-rata (proportional) basis.

Yawar Saeed at First Capital Equities Limited said the company aimed for 7-year cumulative average revenue growth of 19 percent, to be achieved by boosting sales of existing products and introduction of new ones as against an industry revenue growth of 14 percent.

“The introduction of new products particularly [in collaboration] with Mylan [the US pharmaceutical giant] in chemotherapy segment in next two years and expansion in Nutraceuticals unit that will start contributing from 2019 are the major drivers of growth,” Hayat said.

The AGPL has grown steadily through manufacturing and marketing products under licensing arrangements with many companies of international repute and simultaneously through manufacturing and marketing its own brands.

The pharmaceutical company has a strong foothold across the country through a comprehensive access to 32,400 pharmacies in Pakistan through Muller & Phipps Pakistan Private Limited.

The company has undertaken an expansion plan worth Rs800 million to increase the capacity of its general plant (for exports) with a capital outlay of Rs574 million. The aforementioned expansion plan is expected to be completed this year. The AGPL also aims to boost the capacity of its cephalosporin plant, with a cash outlay of Rs117 million, to cater to the increasing demand of its star products and establish production facilities for nutraceuticals – a loosely regulated segment with high margins-- with an expected investment of Rs200 million next year.