The financial market is currently very active, with investors swarming to the Pakistan Stock Exchange (PSX) and investigating the up-and-coming blue-chip Symmetry Group Limited (SGL). The IT company’s listing next week has generated interest due to a potential turnaround after it postponed its Initial Public Offering (IPO) in February.
SGL will be the first listing of the new fiscal year 2023–24 (FY24) on the main board when it goes live on August 8.
In an interview with ProPakistani prior to the IPO, CEO and Co-Founder Sarocsh Ahmed of SGL, a provider of digital technology and experiences, said that the business intends to increase its overall presence in the market during this raging bull run and is well-prepared to go public.
The business intends to sell 101.24 million shares to institutional and private investors in order to generate a minimum of Rs. 430.27 million in equity. With a floor price of Rs. 4.25 per share, the offering would be carried out using a 100% book-building methodology.
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“February 2022 was our first goal for going public. However, a few things occurred, and the Pakistani market environment drastically shifted, making it almost impossible for SGL to go public that year. We established a new board of directors during this time with some well-known and independent people, such Musharraf Hai (ex-Unilever) and Najeeb Agrawalla (CEO 1Link),” Ahmed said.
Plan and expected margins
In response to a query about whether it was SGL’s strategic choice to launch an IPO now, he stated that, in accordance with the Securities and Exchange Commission of Pakistan’s approval, which was given in June, it was not possible to list on PSX in a window that extended past 8–9 August. The timing couldn’t have been better because the market is performing well and bulls have emerged.
Sarosch stated that the company initially preferred a higher fixed price of Rs. 5.5 per share owing to the market condition a few months ago when asked if the share price was too low for a tech IPO in this era. Later, after deliberating on a discounted rate for the listing, we chose a floor price of Rs. 4.25 per share, or an FY23 P/E multiple of 6.38x, which represents a significant discount from the industry-weighted average P/E multiple of 11.48x.
The strategic discount benefits investors in prospectuses. We anticipate that during the auction, the share price would increase by a maximum of 40% to Rs. 5.95 a share, enabling investors to choose the best striking price. thus the discount,” he said.
Future Potential and Opportunities
SGL doesn’t have a large topline like other comparable and main board-listed firms, as has been noted in public forums. The facts, according to Ahmed, speak for themselves, but he also emphasized post-IPO plans that will increase SGL sales. “Our planned exports and both our traditional and new revenue sources will unquestionably raise the topline. The forecasts are appropriate given the state of the market, and SGL anticipates significant growth after the IPO, he continued.
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In response to the question of whether investors should be concerned about SGL’s impeccable but ‘limited’ clientele, he stated, “We have some significant firms like HBL, Jazz, and P&G with whom we’ve worked for a long, long time. Our interactions with our clients go beyond the requirements of our contracts. They stay with us, and SGL will do anything to bring on additional well-known players.
Ahmed added that Pakistanis living abroad can also apply through Roshan Digital Accounts.
Book-Building
For institutional and high-net-worth investors, the book-building process is anticipated to start on August 8-9, 2023, and on August 17-18 for retail investors.
Investors from a range of backgrounds will get interested in the book-building process. Successful bidders will receive 75% of the issue size in the first round, and retail investors will be given the remaining 25%. Bidders may submit offers for 100% of the issue size.
