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Secure Logistics Group Set for IPO Launch, Aiming to Raise $2.1 Million
Secure Logistics Group (SLG), a Pakistani company offering comprehensive logistics services, is gearing up to launch its initial public offering (IPO) next week. This marks the first instance of a company in this sector seeking to raise about 600 million rupees ($2.1 million) from public investors.
SLG, an integrated logistics company with synergistic business lines in logistics, asset tracking, and security services, plans its IPO through a book-building process on March 27 and 28, offering 50 million shares at a floor price of 12 rupees each.
Prior to this, the group has already secured 585 million rupees ($2 million) from the Jeddah-based Saudi Bugshan Group and Karandaaz Pakistan.
“The IPO is significant because it is the first in the logistics space on the main board of the Pakistan Stock Exchange (PSX) and is being offered at the company’s discounted book value,” Shahid Ali Habib, CEO of Arif Habib, the book runner and lead manager of the transaction, told Arab News.
The company reported an earnings per share (EPS) of 2.28 rupees for 2023. The book value of the company as of December 2023 is 17.43 rupees.
Initial public offerings represent the first sale of securities by unlisted companies to the public. They are among the various financing methods used by corporations to meet their financial requirements.
SLG intends to use the funds raised from the IPO to de-leverage its balance sheet and expand its logistics business to accelerate the transformation of the traditional logistics segment.
“The primary goal of raising equity capital is to de-leverage the balance sheet in an unprecedented high-interest rate environment, enhance the company’s technological infrastructure base to complete the ongoing tech pivot, and begin expansion into regional markets,” said Habib.
The company has already arranged pre-IPO investment totaling 585 million rupees from the Saudi Bugshan Group, also known as KBP, a diversified conglomerate headquartered in Jeddah, Saudi Arabia, and Karandaaz Pakistan, which will be converting its shareholder loan into equity.
The share of the Saudi Bugshan Group will increase from 13.6 percent to 17 percent post-IPO, according to Habib.
The strategic investment of the Saudi Bugshan in Pakistan and its additional investment in SLG is a very positive step that will encourage other regional and international players to invest in Pakistan, Habib added.
SLG’s management expects the road transportation sector in the country, under the multibillion-dollar China-Pakistan Economic Corridor (CPEC), to “take off” in the coming years.
“SLG will also be pursuing logistics assignments on the CPEC route to Western China (Kashgar) and Central Asian countries, offering attractive opportunities,” the group stated. “SLG also plans to become a ‘Regional Player’ by connecting to Central Asian markets.”
Road transport accounts for more than 95 percent of inland freight transportation in Pakistan and is the logistics backbone.
Habib emphasized that Pakistan’s equity market is currently attractive for more local and foreign IPOs.
