Pakistan Stock Exchange Holds Gong Ceremony To Mark Listing Of Citi Pharma – OpEd


Another positive development for Pakistan Stock Exchange (PSX), trading in another newly listed company begins! The Initial Public Offering (IPO) of Citi Pharma (CPL) results in the first listing of the current fiscal year (FY22) at the PSX. A gong ceremony was held at the Exchange to mark the special occasion on 12th July 2021, CPL was listed on the Stock Exchange on 9th July, 2021.

The book building phase of the IPO was a tremendous success with the strike price being discovered at Rs32/ share whereas the floor price was Rs28/share. A large number of institutional and individual investors, totaling 516 investors, took part in the book building, of which 340 investors became successful participants. The issue was oversubscribed by 2.0x with total participation of Rs4.087 billion being received against an issue size of Rs2.035 billion at the floor price.

 The general public portion of the Issue was oversubscribed by 1.6 times showing tremendous interest by the public. Applications for a total of 28,751,041 ordinary shares against the issue size of 18,173,000 ordinary shares were received. Significant number of investors also showed interest in investing in the Issue through the EIPO system of Pakistan Stock Exchange. A total of 232 applications for 416,000 shares were filed through the EIPO system. 

The Issue of CPL consisted of 72,692,000 ordinary shares or 35% of the total post-IPO paid-up capital. The entire issue was offered through book building method at the floor price of Rs28/share with a maximum price band of up to 40%. Initially, 75% of the issue size i.e. 54,519,000 ordinary shares were allotted to successful bidders and 25% of the issue size i.e. 18,173,000 ordinary shares were offered to the retail investors at the strike price. The book building dates of the Issue were 15th to 16th June, 2021, whereas the public subscription dates for the retail portion of the Issue were 23rd to 24th June, 2021.

The principal purpose of the IPO was to raise capital for:

 1) Expansion in API (Active Pharmaceuticals Ingredient) Segment: CPL intends to expand their existing capacity of 3,600 tons per annum of Paracetamol to 6,000 tons per annum, and to add new APIs to its existing product line: Ascorbic Acid, Chloroquine Phosphate, and Hydroxyl Chloroquine Sulfate.

2) Expansion in the Formulation Segment: CPL intends to build three manufacturing facilities having total capacity of 200,000 vials per day, dry powder/suspension 60,000 bottles per day, capsules 4,200,000 per day, and tablets 4,500,000 per day. These include dedicated lines for: Penicillin, Cephalosporin and Psychotropic and Narcotic Drugs.

3) Healthcare: CPL intends to build a 50-bed health care facility in Lahore having Out Patient Department (OPD), General Operations and Diagnostic Services.

Speaking about the successful subscription of the Issue of CPL, Nadir Rahman, COO of PSX said, “PSX is very proud of the fact that the first company of the current fiscal year FY22 has already been listed, in the 1st half of July 2021. As a prominent API manufacturer in Pakistan, CPL, having a net turnover of Rs3.5 billion in FY20, is one of the important players in the pharmaceutical industry of Pakistan, given it is current focus on APIs, a substitute for imports. Apart from its goals to expand and increase its manufacturing facilities, CPL has noble goals as well as it intends to set up a 50 bed hospital in Lahore, to further reduce the shortage in healthcare facilities in Pakistan.” He further stated, “I am very pleased to see the immense interest by investors in yet another IPO. This proves the viability and feasibility of raising capital by business and industry in the country through the capital market. The healthy pipeline of prospective issuers who are seeking to raise capital on the Exchange will enable the Exchange to play its integral role as an effective and efficient source of capital formation.”

Rizwan Ahmad Sheikh, CEO of Citi Pharma, speaking about the listing of CPL on the Stock Exchange, said, “We are thankful to Almighty Allah that with this listing, he has elevated us to the next level amongst the Pakistani Companies. However, this elevation comes with increased responsibility and Insha Allah we will put in our best efforts to not only welcome all new shareholders to the Citi Family and give them good results. I would like to take this opportunity to request all capital markets stakeholders as well as shareholders to pray for our success and I would like to highlight here that we have re-aligned our aim, which is to become the No. 1 Company in Pakistan, not just in pharmaceutical sector but across the board by 2030. This will take untiring efforts from our side but we are ready and geared up for the challenge and look forward to aligning with the PSX family and giving the investors a good return on their investment as well as enhancing our aim of serving mankind, Pakistani public and Pakistan, Insha Allah.” 

 Mohammed Sohail, CEO of Topline Securities, the Consultants and Book Runners to the Issue said, “Citi Pharma is a unique company and caters to the growing API needs of entire Pakistan – along with its other products. The Listing will help the Company sponsors realize their expansion plans and also give investors a new flavor of local entrepreneurial skillset and expertise, which Citi sponsors possess. This will also add to the float of the pharma sector at the PSX – something investors have desired for a long time.”

Shabbir H. Kazmi

Shabbir H. Kazmi is an economic analyst from Pakistan. He has been writing for local and foreign publications for about quarter of a century. He maintains the blog ‘Geo Politics in South Asia and MENA’. He can be contacted at [email protected]

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