KARACHI: Digital technology company Symmetry Group Ltd (SGL) is going to raise at least Rs430.2 million next month by selling new and existing shares on the Pakistan Stock Exchange (PSX).

Speaking to Dawn on Saturday, SGL CEO Sarosch Ahmed said the issue is likely to take place in the first 10 days of August.

The entire issue consists of 101.2m shares or 35.5 per cent of the total post-listing shareholding. The fresh issue portion, meaning new shareholding, consists of 88.2m shares or 30.9pc of the post-listing entity.

The offer for sale (OFS) component of the issue, which involves the selling of existing shareholding by the company’s sponsors, comprises 13m shares or 4.5pc of the company’s post-listing paid-up capital.

The entire issue will be offered at the floor price of Rs4.25 per share, which includes a premium of Rs3.25 apiece.

Under the prevailing regulations, there’s a 40pc cap on the floor price, which means the maximum price it can go up to is Rs5.95 per share.

In case the strike price hits the upper limit owing to a high level of interest from investors, the issue will generate a total liquidity of Rs602.4m.

Mr Ahmed said the book will close on hitting 100pc of the issue size i.e. 101.2m shares. However, 25pc of the issue will subsequently be offered to retail investors at the same price that institutional and high net-worth individual investors would pay for the three-quarters of the issue.

The floor price of Rs4.25 per share translates into a (2022-23) price-to-earnings multiple of 6.38 versus the industry’s weighted-average multiple of 11.48. Based on 2023-24 estimates, the investment offers a multiple of 3.71.

SGL’s works on the digitalisation of marketing, sales and other consumer-centric functions of its clients, which include blue-chip firms like Jazz, Unilever Pakistan Ltd, P&G Ltd, Colgate-Palmolive Pakistan Ltd, Habib Bank Ltd, MCB Bank Ltd, Pakistan Stock Exchange Ltd etc.

SGL intends to use the proceeds of the fresh issue (Rs375m) on developing and launching various digital intellectual properties, which will provide SaaS — or software-as-a-service that allows users to connect to and use cloud-based apps over the internet — for consumer insights and visualisation of key performance indicators to aid businesses in decision-making.

Earnings of SGL increased 84pc year-on-year to Rs131.2m in 2022-23. Revenue grew 46.9pc to Rs501.8m over the same period.

SGL’s listing will be the first such transaction in 2023-24. Public listings remained almost non-existent in 2022-23, which concluded less than a month ago. Just one company, Globe Residency REIT, held its initial public offering in the last fiscal year to raise Rs1.4 billion.

The latest data obtained from the PSX shows the only company that’s currently applied for a listing is Treet Battery Ltd. In addition to SGL, the exchange has already approved “prospectuses” by as many as six companies for the fresh raising of capital. These companies are Pakistan Reinsurance Company Ltd, International Packaging Films Ltd, Regal Automobile Industries Ltd, Secure Logistics Group Ltd, Searle Pakistan Ltd and Dalda Foods Ltd.

Published in Dawn, July 23th, 2023