KARACHI: In contrast to the gloomy conditions of the previous year, the flourishing equity market attracted numerous initial public offerings (IPOs), and businesses raised more than Rs8 billion in the calendar year 2024.
According to market experts, such a favorable scenario would emerge after 2021, making it appealing to investors. Additionally, the Pakistan Stock Exchange would set daily records, encouraging businesses to participate in the equity market.
So far in 2024, seven listings have been completed. According to a research report by Arif Habib Ltd., the majority of market participants stated that the equity market is bullish on solid grounds, while some cautious approach was also noted, particularly for small investors. Of these, five initial offerings were on the main board, and two were on the Growth Enterprise Market (GEM) board, which is a separate PSX counter reserved for smaller and more risky companies.
According to Tahir Abbas, head of research at Arif Habib Ltd., “key macros including monetary easing, stable currency, and successful negotiation of IMF Extended Funding Facility amounting to $7bn have created an attractive environment for equity offerings, drawing investor interest and facilitating robust capital raising activities on the Pakistan Stock Exchange.” “The KSE-100 index surged by 42.4pc during CY24TD, reflecting an overall positive sentiment and renewed investor interest.” Additionally, he stated, “the index profitability skyrocketed by 24.4 percentage points during FY24 to a historic high level of Rs1.6 trillion.”
Secure Logistics (SLGL), TPL REIT Fund-I (TPLRF1), International Packaging (IPAK), Fast Cables (FCL), and BF Biosciences (BFBIO) were among the new listings that the main board welcomed in 2024. In the meantime, the GEM board now includes Mughal Energy (GEMMEL) and Burj Clean Energy (GEMBCEM).
This year, IPO capital raised reached its highest level since CY21, demonstrating the market’s strong desire for new investment opportunities.
In 2024, there was a 1.6 times oversubscription of IPOs, with Rs8.4 billion raised and total demand of Rs13 billion.
Ten businesses raised Rs18.3 billion through rights shares and IPOs, demonstrating a consistent need for capital expansion in a variety of industries.
Stylers International, LSE Capital, UDL International, and Big Bird Foods were the four companies that merged to become PSX-listed in CY24, as opposed to the three companies that merged last year.
According to the AHL report, “supported by an improved economic landscape and a tremendous performance by the stock market,” “the IPO market in Pakistan has seen a significant revival in CY24.”
However, obstacles like political uncertainty that slowed economic growth over the past three years were not discussed in the report.
