International Packaging Films Limited (IPAK) has applied for listing on the Pakistan Stock Exchange to raise funds for the expansion of its operations in the future.
The Issue is being made through the Book Building process at a Floor Price of Rs. 34.00/- per share (including a premium of Rs. 24.00/- per share), whereby 75 percent of the total issue size, i.e., 47,625,000 Ordinary Shares, will be issued through the Book Building process to Eligible Investors.
The balance of 25 percent of the total issue size, i.e., 15,875,000 Ordinary Shares, will be issued to the General Public through a retail offer at the Strike Price determined through the Book Building process.
The principal purpose of the Issue is to invest the entire amount raised at the Floor Price as equity investments in Cast Packaging Films (Private) Limited (CPF), Global Packaging Films (Private) Limited (GPF), and Petpak Films (Private) Limited (PPF).
CPF and GPF are wholly owned subsidiaries of IPAK, whereas PPF is a 52 percent owned subsidiary of the company. The reason for not opting to list CPF, GPF, or PPF, instead of IPAK, is that the management of the company perceives that CPF has recently commenced operations, whereas GPF and PPF being greenfield projects have not yet commenced their operations and might not be able to encash its potential as of now. Hence, routing the proceeds through IPAK is a more feasible option.
The Book Building Portion will be underwritten by AKD Securities Limited and Intermarket Securities Limited, and the names of the underwriters to the Retail Portion will be published in the Supplement to the Prospectus.
Bank AL Habib Limited, Habib Metropolitan Bank Limited, and Meezan Bank Limited have been appointed in this IPO as the Bankers to the Book Building.
According to details, the share capital will increase from 360,000,000 Ordinary Shares to 423,500,000 Ordinary Shares after IPO.
International Packaging Films Limited (IPAK)
International Packaging Films was founded in 2015 as a greenfield project to manufacture Biaxially Oriented Polypropylene (BOPP) films.
The company has ventured into manufacturing and selling CPP films through its wholly-owned subsidiary Cast Packaging Films (Private) Limited. It manufacturers packaging products for FMCGs, including Coca-Cola, Unilever, P&G, Mondelez, Peek Freans, etc.
IPAK’s one of its kind five-layer co-extruded production line in Pakistan for manufacturing CPP films has been imported from one of the world’s most renowned and largest manufacturers of CPP film machines, SML Maschinengesellschaft (Austria), with a name-plate capacity of 9,900 tons p.a.
IPAK has reached its optimal operational capacity in all product variants of BOPP films and is currently operating at 90.70 percent of the maximum available capacity. It has made over Rs. 1 billion profit in the nine months of the current financial year with staggering growth from the last year.
The company has decided to undertake a major greenfield expansion to enhance its BOPP Films capacity through its subsidiary GPF incorporated as a private limited company in Karachi, which is expected to commence commercial production in June 2023 at the estimated investment of Rs. 13.5 billion.
The expansion shall be 15.6 percent funded by equity, 10.8 percent by long-term financing, 21 percent by the contribution of the Non-Controlling Group, and 52.6 percent by cashflows of the company.