It may now get bigger pie of Service Long March
The Service Global Footwear Limited has managed to raise Rs2.175 billion through a two-day book-building, which saw participation from institutions and high net-worth investors.
The book-building was over-subscribed 5.8 times, with the share price closing at Rs53.2. It saw a total demand of Rs8.946 billion received against the issue size of Rs1.554 billion.
The IPO proceeds will be invested by the company in Service Long March Tyres Ltd, which will establish a tyre manufacturing unit in Pakistan through a joint-venture between Servis Group and Chaoyang Long March of China.
“SGFL will receive a greater amount of Rs2.175 billion, instead of Rs1.554 billion as it was subscribed at cap,” said Adnan Sami Sheikh, AVP Research at the Pak Kuwait Investment Company. “They may use the additional funds to acquire a larger stake in Service Long March Tyre project.
“SGFL stake in SLM would likely be increased to 23% now, instead of 19% originally planned at a floor price of Rs38,” he said. “Their share in SLM would be higher now, which would be even better for earnings.”
Arif Habib Limited is the lead manager and book runner for this IPO.
The SGFL is the largest footwear exporter of Pakistan since the last decade. In the last two years, it has accounted for over 40% of the total leather footwear exports of the country.
The SGFL exports more than 95% of its total production. In 2020, it exported footwear to more than 20 countries.
The company supplies footwear to global brands like Zara, Caprice, Diana Ferrari, Dockers, Jack & Jones and London Rebel.
The book-building saw participation from 454 investors, including major commercial banks, insurance companies, local and foreign institutions, asset management companies and high net-worth individuals.
The general public will be offered shares on April 12 and 13 at a price of Rs53.2.