Pakistan Stock Exchange saw just three Initial Offerings/IPOs in 2022 thus far with a total amount raised of Rs. 1.3 billion. This is the lowest amount raised in 9 years where IPOs raised Rs. 0.8 billion in 2013.
According to a report by Topline Securities, the number of IPOs is also the lowest after 2019 when Pakistan saw just 1 IPO at PSX. For the analysis, the report excluded Hussain Sugar Preference Shares and GCIL (merger with GTECH).
This is in total contrast to last year when PSX saw 8 offerings with a total amount raised to the tune of Rs. 20 billion. We attribute this to market underperformance and political & economic instability.
In 2022 YTD, the benchmark KSE-100 index is down 11 percent in PKR terms and 30 percent in US$ terms. Average traded daily volume and value are also down 52 percent and 60 percent to 231 million shares and Rs. 7 billion, respectively.
Globally, a similar trend has also been seen where IPOs have dried up. As per Ernst & Young (E&Y), a total of 992 IPOs were witnessed in 2022 raising US$ 146 billion by the end of 3QCY22, which was down by 57 percent year-on-year (YoY). This is attributed to rising macro challenges, market uncertainty, and falling global equity prices.
Out of the three listings at PSX, Adamjee Life Assurance (ALIFE) and Global REIT (GRR) were on the main board whereas Supernet (GEMSPNL) was on the GEM board.
ALIFE: ALIFE is a subsidiary of Adamjee Insurance (AICL), which is owned and operated by the Mansha group. The company is into Life Insurance Business. The company offered 25 million shares at a strike price of Rs. 28, raising Rs. 700 million in March 2022.
GEMSNL: GEMSPNL is a subsidiary of Telecard Limited. The company is engaged in providing Information and Communication Technology Services. The company offered 21.1mn shares at a strike price of Rs. 22.5, raising Rs. 475 million in April 2022.
GRR: Globe Residency REIT is a closed-end development REIT. The company offered 14 million shares to investors at a fixed price of Rs. 10 per unit raising Rs. 140 million.