KARACHI: Rising share prices of technology companies amid the ongoing rally in the stock market have made the upcoming listing of Symmetry Group Ltd (SGL) more attractive to investors, said company CEO Sarosch Ahmed.

       Speaking at a recent press briefing in the run-up to the book-building process scheduled for August 8-9, the CEO of the digital technology company said he hopes investors will submit bids on the higher side.

       The technology firm aims to raise at least Rs430.2 million by selling new and existing shares on the Pakistan Stock Exchange (PSX).

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       The entire issue will be offered at the floor price of Rs4.25 per share, which includes a premium of Rs3.25 apiece. Under the prevailing regulations, the-r-e’s a 40 per cent cap on the floor price, which me-ans the maximum price can go up to Rs5.95 per share.

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       “At Rs5.95 per share, the gap will reduce significantly,” the CEO said while referring to the difference between the company’s price-to-earnings (P/E) multiple and that of the technology sector’s weighted average multiple.

       The multiple or P/E ratio measures a company’s current share price relative to its per-share earnings.

       In case the strike price at the end of the book-building process hits the upper limit owing to a high level of interest from investors, the issue will generate a total liquidity of Rs602.4m.

       The floor price of Rs4.25 per share translates into a (2022-23) P/E multiple of 6.38 versus the industry’s weighted-average multiple of 11.48. Based on 2023-24 estimates, the investment offers a multiple of 3.71.

       Mr Ahmed said one of the reasons for going with a multiple that’s relatively lower than the industry’s weighted average P/E is that market conditions were different when the company did the pricing with the help of its investment bank. The benchmark index has gained 8.3pc in the last 10 sessions alone.

       “At the end, we also have to ensure that we get the IPO subscribed,” he said while referring to the gong-public process that consists of 101.2m shares or 35.5pc of the total post-listing shareholding.

       Speaking on the occasion, Topline Securities Head of Corporate Finance and Advisory Omar Salah Ahmed said the listing process is not dynamic enough to let the issuers revise pricing midway. “It’s a multi-layered process,” he said while referring to regulatory approvals that take about six months on average.

       “Conditions have changed rapidly in the recent weeks… Our discount has grown significantly,” he said.

       The offer-for-sale (OFS) component of the issue, which involves the selling of existing shareholding by the company’s sponsors, comprises 13m shares or 4.5pc of the company’s post-listing paid-up capital. The fresh issue portion, meaning newly created shareholding, consists of 88.2m shares or 30.9pc of the post-listing entity.

       Published in Dawn, Aug 5th, 2023