Fast Cables Limited, a Lahore-based cable manufacturer, is gearing up to take a step into the public market. The company has outlined its plans to offer 25 percent of its post-listing interest in a bid to raise a minimum of Rs. 3 billion, as revealed in the preliminary prospectus shared with the Pakistan Stock Exchange.
Utilizing a method known as 100 percent book building, Fast Cables intends to release 83.5 million shares, equivalent to a quarter of its total post-IPO shareholding. These shares will be priced at a base rate of Rs. 36 per share.
Institutional investors and high-net-worth individuals are anticipated to submit bids that could potentially drive the share price up to Rs. 50.40, representing a 40 percent increase over the floor price. This fluctuation in pricing could result in IPO proceeds ranging between Rs. 3 billion and Rs. 4.2 billion, contingent upon the level of interest from potential investors during the book-building phase.
Within the process of Book Building, bidders will place offers for the entire issue size. The Strike Price, which is the price at which the entire issue is subscribed, will be established. However, the successful bidders will initially receive only 75 percent of the issue size, which equates to 62,625,000 shares. The remaining 25 percent, comprising 20,875,000 shares, will be offered to retail investors through the General Public segment.
Should any shares remain unsubscribed in the General Public portion, these will be distributed on a pro-rata basis to successful bidders from the Book Building portion.
The capital raised from the IPO will be allocated to several strategic areas. This includes acquiring new land, constructing a cutting-edge facility, installing new machinery and equipment, and repaying debt associated with existing machinery and building components. Any excess funds raised beyond the floor price will be dedicated to fulfilling working capital requirements.
The sum of Rs. 3,006,000,000 obtained through the IPO will be channeled into financing land procurement, constructing buildings, and installing advanced machinery. The aim is to enhance production capacity for current product lines and address debt repayment. In case the Strike Price surpasses the Floor Price, any surplus funds will be directed toward the internal working capital needs of Fast Cables.
The Pakistan Stock Exchange has made the company’s draft prospectus available on its website, welcoming public input regarding the IPO until August 17.
Fast Cables experienced a noteworthy growth trajectory in the fiscal year 2021-22. The company’s net profit increased by a remarkable 95 percent, reaching Rs. 1.04 billion, compared to Rs. 532.7 million in the previous year. Concurrently, the company’s sales surged by an impressive 61.6 percent, escalating to Rs. 22.9 billion from Rs. 14.2 billion in the reviewed period.
Fast Cables has established itself as a prominent local manufacturer, specializing in high-quality electrical cables and conductors within Pakistan. The company’s steadfast commitment to quality has positioned it as one of the most trustworthy brands in Pakistan’s cable industry. It is the preferred choice for leading electrical consultants, engineers, and architects. With a production capacity of 8,400 metric tons for copper products and 13,800 metric tons for aluminum products as of December 31, 2022, the company operates two advanced manufacturing facilities in Lahore. These plants are equipped with cutting-edge technology and robust quality assurance systems. Unit I is situated at 7-Canal Bank Main Jallo Road, Harbans Pura, Lahore, while Unit II is located at Bahi Kot, Dars Road, Tehsil-Raiwind, District Lahore.
Fast Cables’ foray into the public market signifies a significant milestone in its journey, reflecting the company’s confidence in its growth potential and its desire to expand its operations. With a track record of impressive financial performance and a reputation for delivering top-quality products, Fast Cables is poised to capitalize on investor interest and leverage the funds raised from the IPO to further solidify its position as a market leader in the cable manufacturing industry in Pakistan.
