The initial public offering (IPO) market in Pakistan has experienced a significant revival in the calendar year 2024, driven by an improved economic landscape and a strong performance by the stock market.
Capital raised through IPOs this year reached its highest level since 2021, underscoring a strong appetite for new investment opportunities. Total demand for IPOs in 2024 amounted to Rs. 13.0 billion, with Rs. 8.4 billion raised, resulting in a 1.6x oversubscription.
According to a report by Arif Habib Limited, key macroeconomic factors such as a downward inflation trajectory, monetary easing, a stable currency, and the successful negotiation of a $7 billion IMF Extended Funding Facility have created an attractive environment for equity offerings, drawing substantial investor interest.
The KSE-100 Index surged by 42.4% during CY24 to date, reflecting positive market sentiment and renewed investor confidence. The index’s profitability also soared by 24.4% during FY24, reaching a historic high of Rs. 1.6 trillion.
This positive momentum has encouraged companies to tap into public equity markets, resulting in five IPO transactions and two listings on the GEM board in 2024, compared to just one IPO last year. New listings on the main board include Secure Logistics Group Ltd. (SLGL), TPL REIT Fund-I (TPLRF1), International Packaging Films Ltd. (IPAK), Fast Cables Ltd. (FCL), and BF Biosciences Ltd. (BFBIO). Additionally, Mughal Energy (GEMMEL) and Burj Clean Energy (GEMBCEM) have been added to the GEM board.
In addition to IPOs, 10 companies issued right shares, raising Rs. 18.3 billion, showcasing consistent demand for capital expansion across various sectors. Four companies were listed on the PSX through mergers in CY24, compared to three last year. These companies include Stylers International, LSE Capital, UDL International, and Big Bird Foods.
Among the notable IPOs, Secure Logistics Group Ltd. (SLGL) has transformed into an integrated provider of logistics, asset monitoring, tracking, and security services. International Packaging Films Ltd. (IPAK) specializes in producing Biaxially Oriented Polypropylene (BOPP) films and has expanded its product range with new production lines. Fast Cables Ltd. (FCL) is a leading manufacturer of electrical cables and conductors, while BF Biosciences Ltd. (BFBIO) focuses on biotech manufacturing, producing life-saving medications.
In the debt market, Rs. 8.6 billion was raised through debt instruments in CY24, compared to Rs. 31.2 billion in CY23. Notable issuances include JS Bank Limited’s Tier II TFC, BankIslami Pakistan Limited’s Ehad Sukuk II, TPL Properties Ltd.’s term finance certificate, and Kashf Foundation’s gender bond aimed at supporting women’s welfare through entrepreneurship and business support.
