Pakistan Stock Exchange announced the listing of BankIslami Pakistan Limited (BankIslami) Ehad Sukuk Certificates with effect from May 14, 2020 whereas trading in the same has commenced from today, May 15, 2020.
The President & CEO of BankIslami, Syed Amir Ali, commenced the listing of the Sukuk issue by striking the PSX gong to open the market, in keeping with the tradition at PSX.
In the wake of the Coronavirus pandemic, the listing announcement and striking of the gong has been held with minimal presence of personnel and was broadcast live on digital platforms.
BankIslami Ehad Sukuk Certificates are fully paid up, rated, perpetual, unsecured, subordinated, non-cumulative and contingent convertible Mudaraba Sukuk certificates which will qualify as Additional Tier 1 (ADT-1) Capital. The Sukuk issue is of Rs 2 Billion inclusive of a Green Shoe option of Rs. 500 million.
The Pre-IPO amount was Rs. 1.7 billion whereas the IPO amount was Rs 300 million. The Pre-IPO portion was subscribed by 27 institutional investors and 45 individual investors. The Consultant to the issue is Next Capital Limited whereas the Market Maker, Joint Advisor and Arranger is JS Global Capital Limited.
The publicly placed issue was oversubscribed as stated by the CEO of BankIslami, Syed Amir Ali, “BankIslami Ehad Sukuk is Pakistan’s first-ever listed ADT-1 Modaraba Sukuk and the popularity of this Sukuk issue among the potential investors can be gauged by the fact that its IPO was oversubscribed by 1.07 times despite the lockdown situation amidst the Covid19 pandemic”.
He further added, “The Ehad Sukuk IPO witnessed a remarkable response from online subscription channels with more than 80% applications received via e-IPO platforms. We are grateful to SBP, SECP, PSX, CDC and our Consultants and Advisors who helped us to achieve this milestone.”
Welcoming the listing of the Ehad Sukuk on PSX, the MD PSX, Farrukh Khan said, “We are very happy to welcome BankIslami, one of our existing listed banks, to the PSX for the listing of their Ehad Sukuk certificates. Given that there is a dearth of Shariah-compliant debt instruments for investors, the listing of the Ehad Sukuk is a step in the right direction for providing investors with shariah-compliant investment alternatives, easily accessible through the Stock Exchange”.
He further added, “Pakistan Stock Exchange is at the forefront of providing new avenues of investment, whether conventional or Shariah-compliant. We aim to provide a transparent & robust trading platform for investors and issuers alike”.
The CEO of Next Capital, Najam Ali, stated, “It is of great pride to conclude the IPO and listing of first Additional Tier 1 Sukuk in these challenging and uncertain times. Investors’ response to the IPO during the ongoing pandemic was very encouraging as we managed to conclude the IPO with 127 applications, resulting in oversubscription.
The success of this IPO is a testament to investors’ confidence in BankIslami which has delivered impressive performance during the last year.
The issue amount will contribute towards Additional Tier 1 Capital of BankIslami for Capital Adequacy Ratio as per guidelines set by State Bank of Pakistan. The funds raised will be utilized in the Bank’s financing and investment activities (general pool) as permitted by its Memorandum & Articles of Association.
BankIslami Ehad Sukuk Certificates have a floating expected profit rate of 3 Months Kibor plus 275 basis points and their face value is Rs 5000 per Certificate. The profit payments of the Sukuk will only be paid from the relevant month’s attributable profit of the general pool. The instrument has been rated A- (A minus) by PACRA.
Pakistan Stock Exchange is hopeful that the listing of this Shariah-compliant instrument will generate significant interest from investors, traders and the general public.