Panther Tyres Limited has successfully raised Rs 2.63 billion through a two-day book building process at the Pakistan Stock Exchange (PSX).
On Thursday, Panther Tyres Limited raised funds worth Rs 2.63 billion through the auction of 40 million shares to institutional, rich individual and retail investors at PSX.
The company made a new record during the auction as it sold shares at the upper limit. The two-day book building process was oversubscribed by 4.4 times with a strike price clocked in at Rs 65.80 per share, higher than the floor price of Rs 47 per share.
Initial Public Offering (IPO) Consultant, Arif Habib Limited CEO, Shahid Ali Habib said, “This has happened for the first time in history that any company has sold shares at the upper limit during the book building process … since the introduction of 40% cap rule a few years ago.
He added, “The purpose of the new issuance is to partially fund the company’s expansion project. The purpose of the expansion project is to enhance the production capacities of tyre sets and tubes (packed). State-of-the-art machinery is being imported for this enhancement,” Panther Tyres said in its prospectus available on the PSX website.
“The company expects the completion of expansion plan by the third quarter of fiscal year 2022 ie March 31, 2022,” it said.
Moreover, the tyre set manufacturing capacity is planned to be enhanced by 21% to 9.8 million compared to 8.1 million at present. Likewise, the manufacturing capacity of tubes (packed) is designed to be increased by 34.6% to 42 million compared to existing 31.2 million.
A significant part of tyre and tube industry of Pakistan was dominated by imported and grey market tyres and tubes, said the company while elaborating the need for capacity expansion.
It added, “Recent initiatives taken by the Federal Board of Revenue – Customs Operations to curb money laundering, illicit movement of commodities and black economy will provide a window of growth to local tyre and tube manufacturers to capture the grey market share of tyres and tubes.”