close
Advertisement
Can't connect right now! retry

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!
October 23, 2020

PSX CEO says stock market withstands COVID-19 pressures

Business

October 23, 2020

KARACHI: Pakistan Stock Exchange (PSX) has weathered the COVID-19 challenges as investors are undeterred while showing response to three initial public offerings (IPOs) this year, its chief executive officer (CEO) said on Thursday.

Farrukh Khan, CEO of PSX said the year 2020 has shown tremendous growth in terms of offerings on the equity board and debt sector of PSX.

“This year has been a challenging one with different factors responsible for making it a difficult year for the economy as a whole and the capital market in particular from the COVID-19 pandemic to the terrorist attack on the exchange and the thunderstorms that could have weighed in on the market,” Khan said, addressing a ceremony to market the IPO by Agha Steel.

“The capital market of Pakistan has withstood pressures emanating from all these factors and shone brightly right through them.”

PSX chief said there are three new listings on the equity board so far this year.

Shahid Ali Habib, CEO of Arif Habib – the lead manager and book runner to the Issue, said this was the largest IPO for a steel company in Pakistan.

Total 298 investors participated in the book building and over 5,200 participants in the general public subscription.

“The market and the investors have shown strong resilience post-easing of COVID-19 lockdown and Arif Habib Limited remains poised to bring several other companies for listing in the next few months,” Habib said.

The Issue of Agha Steel Industries consists of 120 million ordinary shares or 20.8 percent of the total post-IPO paid-up capital. The Issue was offered through 75 percent book building method and 25 percent retail/public portion.

The floor price in the Issue was set at Rs30 per share.

The book building phase of the IPO was held on October 6 and 7, whereas the public/retail subscription phase took place on October 14 and 15.

There was an oversubscription of 1.63 times. The strike price was locked in at Rs32 per share which is 6.7 percent higher than the floor price.

A strong and positive response was also seen in the retail portion of the IPO. Applications for a total of 38.32 million shares were received against the issue size of 30 million ordinary shares. The issue was oversubscribed by 1.3 times.

Agha Steel raised Rs3.84 billion through the IPO against the target of Rs3.6 billion, reflecting the rousing response of investors to IPO-deficient PSX.

Agha Steel said it will utilise the IPO proceeds for its phase-II expansion, which includes increasing the production capacity and continuing the technological upgradation and advancement.

“The financial corporate market of Pakistan is very vibrant and we are very positive on the overall financial growth of the industry,” said Hussain Agha, CEO of Agha Steel.

The company is also set to install an in-house air separation unit project.

The total cost of the project is Rs7 billion, wherein 51 percent of the total funding requirement is set to be raised through the IPO and the remaining cost through long and short term debt financing.