PABC IPO general subscription starts today

KARACHI: The Pakistan Aluminium Beverage Cans Ltd (PABC) will offer 23.4 million shares or 25 percent of its total initial public offering (IPO) for general subscription on Tuesday (today) at the strike price of Rs49, a statement said.

The IPO subscription for the general public would remain open on June 29 and 30 from 9:00am to 5:00pm, during the banking hours, while e-IPO process would continue for 24 hours, the statement added. The book-building phase of PABC concluded last week with an oversubscription of 3.3 times and highest ever record-breaking participation of Rs10.8 billion by investors, making PABC the largest IPO after Interloop from the private sector. The company had stated that it planned to raise Rs3.3 billion through an IPO on the PSX by the end of June.

The IPO received an overwhelming response from institutional investors and high net worth individuals as the strike price clocked in at Rs49/share, 40 percent higher than the floor price of Rs35, raising Rs4.6 billion for the company.

PABC supplies beverage cans to the bottlers of all major carbonated drinks, including PepsiCo and Coca-Cola, in both Pakistan and Afghanistan. Exports to Afghanistan constituted 35 percent of the company's sales in calendar year 2020.

Established on a 20.9-acre piece of land in Faisalabad's Special Economic Zone with a current rated capacity of 700 million cans per annum, PABC continues to enjoy a 10-year tax holiday. The company is increasing its rated capacity by almost 36 percent to 950 million cans per annum by July next year.

The company has grown its revenue at an annualised rate of 18.7 percent in the last five years. In the third full year of its operation (2020), the company's net profit amounted to Rs610.7 million, up 314 percent from 2019. It expects its bottom line to grow at 140 percent in 2021.

PBAC recently signed agreements and initiated exports to leading beverage players in the United States. North America accounts for more than one-third of the global consumption of aluminum cans mainly because of the environmental concerns. The company is also in discussion with key beverage bottlers in Bangladesh and Iraq.