Panther Tyres Pvt. Limited is planning to go for an Initial Public Offering (IPO) at the Pakistan Stock Exchange (PSX), aiming to raise an amount of Rs. 3 billion.
The IPO is expected to take place in the next few weeks. The company has set a floor price of Rs. 47 per share, which includes a premium of Rs. 37 per share, with an upper limit of 40 percent above the floor price.
The issuance of 30 million ordinary shares, representing 21.42 percent of total post-IPO paid-up capital through the book-building process, and the remaining 10 million ordinary shares, representing 7.14 percent of the total post–IPO paid-up capital through a public offering.
In the tyres segment, the company’s capacity utilization levels are hovering at 82.6 percent, whereas, in the tube segment, utilization exceeds 92 percent. An increase in auto sales, on account of higher two and three-wheel demand, give Panther an edge in organic growth.
To meet the expected increase in demand for tyres and tubes, the company intends to raise the funds through IPO for the Expansion and Modernization of its production facilities.
The company will raise Rs. 3 billion through IPO proceeds (46 percent), Long Term Debt financing (24.5 percent), Bridge Financing (13 percent), and internal cash generation (16.5 percent).
The demand for tyres and tubes is increasing, given escalating auto sales – mainly the segment of 2-wheelers tube which looks more attractive due to rising population, urbanization, and heavy demand of replacing of tyres and tubes in Urban areas.
Panther Tyres will be the third tyres and tube manufacturers to get listed in Pakistan, after General Tyre and Servis Industries Limited.
Panther Tyres has also developed a limited export market with 12 countries in its clientele, including Turkey, Poland, Macedonia, Egypt, Bangladesh, UAE, Afghanistan, Nigeria, Kenya, Sudan, Yemen, and Syria.
As of now, the company has a 25 percent market share of the overall tyre and tube sector. It caters to the replacement market through its 500 direct business partners in the capacity of distributors and dealers and 40,000 indirect business partners.
The company made a profit of Rs. 254 million in the first quarter of 2020-21.