Airlink IPO: Taking a step forward to ‘Make in Pakistan’

KARACHI: Mobile manufacturing appears to be another flourishing segment of Pakistan as it has become the talk of the town since PTA released the data as per which, the production of mobile phones by local manufacturing plants surpassed the mobile phone import.

The government is also encouraging mobile phone manufacturing in Pakistan through Mobile Device Manufacturing Policy, 2020 in order to reduce import dependence and scale up the production capacity to generate exportable surpluses.

Not to forget, under the vision of Make in Pakistan, the tariff structure has been rationalized by creating a tariff differential between Completely Built-Up Unit (CBU) and Completely Knocked Down (CKD) and Semi Knocked Down (SKD) kits. To make the most out of it, Airlink Communication Limited, the largest distributor of mobile phones & accessories in Pakistan is planning to issue 90,000,000 ordinary shares at a floor price of Rs 65/share with the maximum ceiling rate at Rs 91/share (with the price band set at 40%).

The process would be conducted through 100% book building. Out of the 90mn shares being issued 60mn would be issued by Airlink Communication Ltd (IPO) and the rest 30mn (OFS) by Muzaffar Hayat Piracha who is the CEO of the company.

Of the book-building process, 75% would be assigned to corporates and high net worth individuals and the rest of the 25% will be allocated to the retail traders.

The company is planning to raise Rs5.85 bn through this process where Rs3.9 bn would be through the new issuance of shares offered by Airlink Communication Limited and the rest Rs1.95 bn would be raised through an offer of sale through the shares offered by the CEO as mentioned above. The money raised through this will be used by the company to fund their working capital requirements going forward, a report by Darson Securities noted.

Airlink Communication Limited is one of the primary distributors and assemblers of cellular devices within Pakistan. The company is one of the largest mobile phone distributors of Pakistan with a market share of around 20% within imported mobile phones.

Initially, the company operated as an “importer-cum-distributor” business model. However, the company has started to manufacture mobile phones locally in Pakistan since April’ 21 with a monthly capacity of 400,000/units per month which is expected to reach up to 550,000/units per month by FY23. - Mettis Link News