Amreli Steels Thursday successfully sold 138.8 million shares through its first initial public offer (IPO) at the Karachi Stock Market (KSE) raising Rs 3.79 billion against its expansion project of Rs 3.4 billion.
Amreli Steel, the second in the steel sector and 6th at KSE in 2015, has successfully completed its book building part on Thursday and received total bids of 138.8 million shares compared to the book building offer of 55.5 million shares.
To recall, Amreli has offered cumulative 74.25 million shares for sale through book building and general public offer to raise at least Rs 1.78 billion at a floor price of Rs 24 per share. The IPO proceeds would be used to expand the company’s re-bar and billets manufacturing capacity with the total cost of Rs 3.4 billion.
Out of the total 75.25 million shares being offered, 55.5 million were offered to institutional and high net worth investors via book building, which was held on October 7 and 8, 2015.
In the book building process, which concluded Thursday at 5:00pm, Amreli was oversubscribed by 1.5 times with the strike price set at Rs 51. The company received total bids for 138.8 million shares which translate to Rs 6.45 billion. At Rs 51 per share, the company has raised Rs 2.83 billion from the book building.
Including the general public offer, the company would raise total amount of Rs 3.79 billion (assuming full subscription at general offer) while the cost of the expansion project is Rs 3.4 billion, which will be now completely equity funded. Amreli Steels, one of the largest makers of reinforcement bars in Pakistan, has reported a net profit of Rs 1.01 billion for the fiscal year that ended on June 30, 2015, up by a whopping 301 percent compared to Rs 252 million in FY14.
