Karachi, March 8, 2019: After a long time a mega investment of over Rs 11 billion has been announced by Pakistan based world largest textile group Inteloop.
Pakistan’s leading hosiery manufacturers Interloop has planned to invest some Rs 11.254 billion to expand its hosiery segment by adding a new production facility in Faisalabad and Setup a denim production facility for stitching denim Jeans in Lahore.
Interloop Limited, launched with 10 knitting machines in 1992, has grown into one of the world’s largest Hosiery manufacturers; a complete vertically integrated company with state of the art Spinning, Yarn Dyeing, Knitting and Finishing facilities.
With over 6,000 latest Italian Knitting Machines, 16,000 employees and an organizational network spread over 3 continents, Interloop has the proficiency to work with different materials and make a wide range of products.
From scratch to becoming a $ 270 million company, Interloop produces 700 million pairs of Socks & Tights annually, for world top international brands & retailers.
In order to arrange the financing for expansion, the company has planned to add a debt to equity ratio of 56:44, for this purpose the Company intends to issue 109,000,000 ordinary shares at a floor price of Rs 45.00/-per share to raise Rs 4.905 billion through Initial Public Offer (IPO). While, an amount of Rs 6.349 billion will be borrowed from banks.
Overall the company has planned an investment of Rs 11.254 billion, out of which some Rs 6.591 billion will be utilized for plant and machinery Rs 3.065 billion for land and building, Rs 1.432 billion for power and other utilities and an amount of Rs 166 million will be utilized for other expenditures.
According to Spectrum Securities Limited, The IPO comprises of 109,000,000 Ordinary shares of face value of PKR 10/- each, which constitutes 12.5 percent of the total post-IPO paid up capital of the Company. The Floor Price of Rs 45.00/- has a maximum Price Band of 40 percent above which no bid will be accepted. At maximum Price Band, the highest strike price that can be bid was Rs 63.00/- per share.
Initially, 75 percent of the issue size i.e. 81,750,000 Ordinary Shares will be allotted to Successful Bidders and 25 percent of the issue size i.e. 27,250,000 Ordinary Shares will be offered to Retail Investors.
Unsubscribed shares, if any, of the General Subscription portion will be allocated to Successful Bidders of the Book Building portion on a pro-rata basis.
Interloop’s Floor Price of PKR 45.00/- per share, based on earnings for the year ended June 30, 2018, translates to a price to earnings (P/E) multiple of 8.2x.
Analysts at Pakistan Stock Exchange has recommend subscription of Interloop shares @ Rs45/share.
It may be mentioned here that Interloop has long standing relations with its customers including Puma for 15+ years, JC Penny & Tesco for 10+ years and Nike and H&M for 5+ years to name a few. Furthermore customers of Interloop show immense confidence in Interloop’s products and quality assurance.
Given the global growth forecasted in both Hosiery and Denim segments and the overall growth forecasted in the garments industry, Interloop is positioned to add to its long trend growth in revenue and market share.