Interloop, a Pakistani manufacturer of socks for various global brands, has applied for a listing at Pakistan Stock Exchange (PSX) with the plan to float 109 million ordinary shares in the Initial Public Offering (IPO).
According to the initial draft issued by the company to PSX, the entire issue of 109,000,000 Ordinary Shares will be offered through Book Building process at a Floor Price of PKR 45.00/- per share. Initially, 75% of the issue size i.e. 81,750,000 Ordinary Shares will be allotted to successful bidders and 25% of the issue 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. The floor price of PKR 45.00/- has a maximum price band of 40% above which no bid shall be accepted. At maximum price band, the highest strike price that can be bid for shall be PKR 63.00/- per share.
An Individual and Institutional Investor whose Bid Amount is not less than the minimum bid size of PKR 2,000,000 (Two Million Rupees only).
The date of the IPO will be announced in the coming days.
Interloop at Present
Interloop was established in 1992 in Pakistan. Over the years, the company has emerged as one the largest hosiery manufacturers globally with a customer base of top global brands including the likes of Nike, Adidas, Puma and Reebok to name a few.
The company has heavily invested in increasing its production capacity and currently has 4,500+ state of the art knitting machines in operation with production of nearly 600 million pairs of socks/annum. The company not only expanded its operations in Pakistan but has gone global by establishing a production facility in Bangladesh. It also has an allied manufacturing concern in Sri Lanka.
Interloop has service level agreements with ILNA Incorporation, a North American company, Global Veener Trading Limited (Switzerland) and Eurosox Plus BV (Holland) in Europe which represents Interloop in the North American and the European region, to identify emerging growth opportunities in the socks business & provide trend analysis, sales, marketing, warehousing & logistic services.
Over the past 5 years, the company has experienced growth in revenue at a CAGR of 8.3%. Its gross profit margins have grown and, as of year-end June 30, 2018, were recorded at 30%. Operational efficiency of the company is also evident from the fact that the company’s EBITDA has grown at a CAGR of 11.7% over the last 5 years.
Interloop Plans to Raise its Revenue
Interloop primarily operates in the Hosiery segment. Its revenues in the global hosiery market are expected to reach US $51 billion/annum by 2021 from US$ 43 billion in 2016 at a CAGR of 3.5%. Interloop is also planning to enter into the Denim segment which is estimated to grow globally at about 6.4% annually from US$ 57 billion in 2016 to US$ 75+ billion in 2021.
In addition, increasing disposable income and inclination towards western fashion trends, emerging economies are shifting their purchasing patterns towards quality textile products. Higher quality, durability, comfort level, and easy availability are the main reasons for the growing demand amongst the youth. Evolution of e-commerce has also increased accessibility thereby improving distribution channels and facilitating consumption, according to the company plans.