KARACHI, October 28 2024: The Initial Public Offering (IPO) market in Pakistan is experiencing a noteworthy resurgence in the calendar year 2024, bolstered by a more favourable economic climate and robust performance on the stock market, according to analysts.
Key macroeconomic indicators such as a declining inflation rate, easing monetary policy, a stable currency, and the successful negotiation of a $7 billion IMF Extended Funding Facility have created a conducive environment for equity offerings. This has sparked investor interest and facilitated strong capital-raising activities on the Pakistan Stock Exchange (PSX), as highlighted in a recent report by Arif Habib Limited.
The KSE-100 Index has climbed 42.4% so far in 2024, signalling a positive market sentiment and a resurgence in investor engagement. Furthermore, profitability within the KSE-100 index soared by 24.4% during the fiscal year 2024, reaching an unprecedented level of Rs 1.6 trillion.
The report indicates that this positive momentum in the stock market has prompted companies to explore public equity options. In 2024, five IPO transactions have been successfully executed, a significant increase from just one transaction the previous year.
This year, the main board has welcomed several new listings, including Secure Logistics (SLGL), TPL REIT Fund-I (TPLRF1), International Packaging (IPAK), Fast Cables (FCL), and BF Biosciences (BFBIO). Additionally, Mughal Energy (GEMMEL) and Burj Clean Energy (GEMBCEM) have made their debut on the Growth Enterprise Market (GEM) board.
The report further notes that the capital raised through IPOs this year has reached its highest level since 2021, underscoring a strong demand for new investment opportunities in the market.
The total demand for IPOs in 2024 has reached Rs 13 billion, with Rs 8.4 billion successfully raised, leading to a substantial oversubscription of 1.6 times.
In addition to IPO activities, ten companies have issued rights shares, raising Rs 18.3 billion, which reflects a consistent demand for capital expansion across various sectors.
In 2024, four companies have been listed on the PSX through mergers, compared to three companies last year. The newly merged entities include Stylers International, LSE Capital, UDL International, and Big Bird Foods.
