As it prepares for its IPO, Air Link hopes to tap into Pakistan’s “gold mine.”
The mobile distributor and assembler recently announced plans to raise Rs5.85 billion through an initial public offering (IPO) this month, making it Pakistan’s largest in the private sector. The company is selling 90 million shares at a minimum price of Rs65 per share to raise the funds, which will be utilised to satisfy working capital needs and expand the distribution network, according to Piracha.
The profits of the IPO would be utilised to boost Air Link’s operating capital and expand the company’s distribution network, according to Piracha.
The company currently operates 14 retail shops in five cities and has a network of over 4,000 retailers and 1,000 wholesalers in over 300 cities.
According to the CEO, Air Link’s sales climbed from Rs140 million to nearly Rs47 billion between 2012 and 21. “The firm plans to grow its topline by at least 50% in the next financial year after the IPO,” says the statement.
The IPO comes as the government pushes for a “Made in Pakistan” approach, granting incentives and tax advantages to boost manufacturing, as well as as the stock market continues to rise after a pandemic-related drop last year.
The country’s demographics and consumer trends, according to Piracha, are also favourable. “Along with the government’s emphasis on ‘Made-in-Pakistan,’ the country’s demographics and consumer trends appear to be favourable. Between 2012 and 21, Air Link’s sales increased from Rs140 million to approximately Rs47 billion, according to the CEO. According to the announcement, “the firm expects to raise its topline by at least 50% in the next financial year after the IPO.”
The IPO comes as the government pushes for a “Made in Pakistan” approach, offering incentives and tax breaks to encourage manufacturing, and as the stock market recovers from a pandemic-related dip last year.
According to Piracha, the country’s demographics and consumer trends are also favourable.
“The country’s demographics and consumer trends look to be favourable, which coincides with the government’s emphasis on ‘Made-in-Pakistan.’
Piracha went on to say that the company intends to progressively quadruple its current production capacity, praising Samsung’s debut into Pakistan.
Lucky Motor Corporation Limited was recently granted Mobile Device Manufacturing (MDM) authorization by the Pakistan Telecommunication Authority (PTA) to manufacture Samsung-branded phones in Pakistan.
Meanwhile, Air Link opened a smart phone manufacturing facility in March with a production capacity of 6 million units per year.
IPO push
The forthcoming IPO will be the largest by a non-state firm in Pakistan. Interloop Limited, a textile behemoth, collected Rs5.025 billion in the then-largest private-sector initial public offering (IPO) in 2019.
Air Link’s IPO comes as Pakistan has seen a record number of IPOs on the PSX, with 8 IPOs offered in FY2020-21 alone, a considerable increase from the previous fiscal year’s zero IPOs.
In 2009-10, there were eight initial public offerings, while in FY15, there were seven. However, between FY18 and FY20, Pakistan’s stock market was plagued by an economic slowdown and political uncertainty, resulting in the launch of seven initial public offerings (IPOs).
