During FY2021, the Pakistan Stock Exchange (PSX) had the greatest ever equity, with Rs. 20 billion raised through initial public offers (IPOs).
It’s worth noting that these IPOs drew a demand of Rs. 44 billion, compared to Rs. 20 billion raised. According to a research by brokerage house Arif Habib Limited, the PSX recorded the largest number of transactions in 14 years this year. Prior to this, the maximum number of transactions in a single year was 12 in FY2007.
In the current fiscal year, the PSX has registered more than Rs. 80 billion in investment and debt raised by the companies from institutional, individual, and retail investors.
The majority of the enterprises had raised cash to expand their production capacity, thanks to Pakistan’s low interest rate, which encouraged investors to fund expansions in the hope of a higher return in the future.
The Organic Meat Company, TPL Trakker Limited, Agha Steel Industries Limited, Panther Tyres Limited, Service Global Footwear Limited, Citi Pharma Limited, and Pakistan Aluminum Beverage Cans Limited were among the eight IPOs this year, with seven new listings, including The Organic Meat Company, TPL Trakker Limited, Agha Steel Industries Limited, Panther Tyres Limited, Service Global Footwear Limited, Citi Pharma Limited, and Pakistan Aluminum Beverage Cans Limited.
Moreover, during the current fiscal year, 25 enterprises issued right shares, raising Rs. 50 billion in capital. Existing owners are offered shares at a discounted price compared to the current market share price. In addition, a corporation raised Rs. 11 billion in debt on the PSX.
In addition to the establishment of new projects by companies under the State Bank of Pakistan’s (SBP) Temporary Economic Refinance Facility, the expected IPOs in the coming fiscal year will be backed by an economic turnaround, low interest rates, and an expansion of existing production capacities at factories (TERF).
The benchmark index reached a four-year high of 48,982 points in June, contrasting sharply with the five-year low of roughly 27,000 points in March 2020, following the pandemic’s outbreak in Pakistan in February 2020.
