Agha Steel Industries Limited (ASIL) received an overwhelming response from stock traders as its book-building of Initial Public Offering (IPO) was oversubscribed by 1.63 times, according to a statement issued by the company.
This is the third IPO at Pakistan Stock Exchange (PSX) so far in 2020 after successful IPOs of The Organic Meat and TPL Trekker.
The strike price clocked in at Rs. 32 per share, higher than the floor price of Rs. 30. ASIL has set up to raise Rs. 3.8 billion whereas investors demand amounted to Rs. 4.4 billion as against the IPO’s book-building size of Rs. 2.7 billion.
The company said it would use the proceeds to finance the expansion of its re-rolling capacity to 650,000 tonnes, from 250,000. It will increase the reinforcing bar production capacity by 160 percent.
The general public would now be offered 30 million shares (25 percent of the total offer size) on October 14-15 at the strike price of Rs. 32.
“This means Agha Steel is going to raise Rs. 3.8 billion in total, making it the largest IPO in the steel sector and the second-largest IPO in the private sector,” said the statement
Pakistan’s government is working aggressively to develop the housing and construction sector across the country through various schemes and projects I collaboration with the private sector.
Sector such as steel is set to flourish its business to meet the local demand through its required products of the construction and housing sector. Hence, the future of steel producers is promising in the near future.