Dalda Foods Ltd., Pakistan’s leading manufacturer of cooking oil, has announced its plans for an initial public offering (IPO) in order to increase its production capacity.
The company is aiming to raise between Rs. 3.3 billion ($14 million) and Rs. 4.6 billion through the sale of its shares, which is stated to be held before Ramadan on 22nd March 2023, according to the CEO of Dalda Foods, Aziz Jindani.
If the IPO gets Rs. 4.6 billion, it would be the largest by a Pakistani consumer staple company. This would also be the country’s largest IPO after Air Link Communication raised Rs. 6.4 billion through an IPO in September 2021.
The proceeds will be used to fund the expansion of Dalda’s factory at Port Qasim, which will more than double the current oil extraction capacity from seeds to 900 tons per day, added Jindani.
The IPO could see around 50 million shares up for grabs, with two-thirds being new shares and the remainder coming from current shareholders, disclosed Shahid Ali Habib, CEO Arif Habib Ltd., the sole advisor to the IPO.
Dalda dates back to 1937 when Unilever launched it in the region. In 2004, Westbury Group, owned by Bashir Jan Mohammad and a group of employees, bought Dalda’s Pakistan business from Unilever. The company has also expanded into the business of liquid tea whiteners.
Regardless of unprecedented inflation and the prevailing economic crunch, cooking oil remains an integral part of Pakistani kitchens. Dalda’s revenues have increased at an average rate of 27% per year since 2018, and reached Rs. 88 billion in FY2022, surpassing big food manufacturers such as National Foods Ltd. And FrieslandCampina Engro Pakistan Ltd, stated Jindani.
Dalda’s products make up around 5% of Pakistan’s cooking oil market share, estimated to be worth around $8 billion, said Jindani.
The listing could enable Dalda to get a major share of Pakistan’s fragmented edible oil market.
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