Service Long March Tyres (Private) Limited has received approval from the Pakistan Stock Exchange (PSX) to launch an Initial Public Offering (IPO) to raise Rs7.8 billion. The company will offer 195 million ordinary shares at a floor price of Rs40 per share.
IPO Details and Utilization of Funds
The IPO proceeds will be utilized to expand the company's manufacturing capacity and reduce its debt burden. The company plans to increase its tyre production capacity by 30% to meet growing domestic and international demand.
Service Long March Tyres is a joint venture between the Pakistani Service Industries and China's Long March Tyre Corporation. The company has been operating in Pakistan for over a decade and is known for producing high-quality tyres for passenger cars, light trucks, and heavy commercial vehicles.
Financial Performance and Growth Prospects
In its prospectus, the company reported strong financial performance over the past three years, with revenues growing at a compound annual growth rate (CAGR) of 15%. The company's profit after tax also increased significantly during this period.
Market analysts believe that the IPO will be well-received by investors given the company's solid fundamentals and growth prospects. The tyre industry in Pakistan has been growing steadily, driven by increasing vehicle sales and infrastructure development.
PSX Approval Process
The PSX approval was granted after a thorough review of the company's financials, business plan, and compliance with regulatory requirements. The company will now proceed with the book-building process to determine the final issue price.
The IPO is expected to open for subscription in the coming weeks. Service Long March Tyres will be listed on the main board of the PSX under the symbol "SLMT."
