Air Link Communication becomes the first mobile distribution company that is all set to raise Rs 5.85 bn from its IPO offering. The 90 million shares are being offered on the Pakistan Stock exchange to increase its import and distribution capacity, open more outlets nationwide as well as ventures into the other segment of the Technology Industry including manufacturing and cloud services. For this purpose, it has applied for listing at the Pakistan Stock Exchange (PSX) and investors have shown keen interest because of its impeachable success story in the mobile industry.
The importer and distributor of mobile phones will initially offer 90 million shares to corporate, high net-worth individual and retail investors via book building.
Air-link All Set to Raise Rs 5.85 Bn from IPO for Expanding Pakistan Operations
JS Global- lead manager and consultant for the issuance of shares suggest the minimum share price of Rs65. So, the investors will not be able to offer a buying price below this rate in the auction along with a maximum price band of up to 40%.
The company prospectus also notes that the conversion rate from feature phones to a smartphone is very high and the introduction of ride-hailing services have also increased the demand of the smartphones.
“Device Identification, Registration and Blocking System (DIRBS) by Pakistan Telecommunication Authority (PTA) has significantly enhanced the demand for documented imported phones by blocking all grey market (smuggled) phones, which are estimated to be around 30-35% of the overall mobile phone market. The growing e-commerce industry will further enhance the demand for smartphones.” stated the prospectus.
The Pakistan Customs and a GfK has reported that the company is owning “a market share of around 20% within imported mobile phones.”
According to the prospectus “IPO (initial public offering) proceeds would be utilised for injection of working capital to expand the company’s distribution and retail network,”
It is to be expected that the company will generate Rs5.85 billion at a floor (minimum) price worth Rs65 per share. Out of Rs5.439 billion, the company is planning to utilize Rs3.90 billion (new issue of 60 million shares) in order to finance working capital requirements while the remaining Rs1.539 billion shall be financed from ST (short-term) financing facilities.
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