Mobile distributor Air Link plans Pakistan’s biggest private sector IPO

KARACHI: Air Link Communication Ltd. plans to raise at least Rs5.85 billion ($36 million) through an initial public offering this month, which would be the largest from a non-state firm in Pakistan, Bloomberg reported

The Lahore-based company plans to sell new and existing shares at a price between 65-91 rupees each, Chief Executive Officer Muzzaffar Hayat Piracha said in a reply to queries. It will take investor orders on August 30 and 31 and then price the offering.

Pakistan has seen a record streak of IPOs this year. Air Link, which started operations about a decade ago and has since become one of the largest distributors of phones in the country, saw sales rise 50 percent to 3.6 million units in the year ended June.

The company plans to issue 60 million new shares and Piracha will sell 30 million from his holdings, said Kamran Nasir, CEO at JS Global Capital Ltd., consultant and bookrunner to the transaction.

The IPO will be the largest since Interloop Ltd. raised about Rs5 billion in 2019.

Air Link, which has also recently expanded into mobile assembling, plans to use the funds to expand its distribution network. It aims to have 150 outlets by 2026 from 14 currently, which will boost margins together with the assembly business, said Nasir.

The company expects its revenue to triple to Rs129 billion rupees and net income surging 500 percent to 9.2 billion rupees by fiscal 2025 from 2020, according to Nasir.

The company reportedly plans to sell new and existing shares within the range of 54-91 rupees per share. According to the media report, the investor orders shall be taken by the company on the 30th and 31st of August, and then the offering price shall be decided.

The country has seen eight IPOs in the last fiscal year 2021, where eight offerings were seen by The Organic

Meat Company, TPL Trakker Limited, Agha Steel Industries Limited, Panther Tyres Ltd, Service Global Footwear Ltd, Citi Pharma Ltd, and Pakistan Aluminium Beverage Cans Ltd.

The eighth was a preference share issuance of Engro Polymer and Chemicals Ltd. This led to a total raising of Rs31 billion in FY21.

Air Link has been in the distribution business for a decade working with top smartphone brands like Samsung, iPhone, Huawei, Xiaomi, Alcatel, TCL, Tecno & iTel. The production plant has the capacity to produce 6 million units per year.

It must be mentioned that the company has recently expanded into the mobile manufacturing facility in March.