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Air Link plans Pakistan’s biggest private sector IPO

One of the biggest mobile phone distributors in the country, Air Link Communications Limited has decided to raise capital via an initial public offering. The company plans to begin the proceedings for the offering by the end of August.

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Air Link Communications Ltd plans to raise $36 million or Rs5.6 billion through an initial public offering (IPO) this month.

This would be the largest IPO ever from a private firm in Pakistan, international media outlet Bloomberg reported.

It would be surpassing the previous highest offering by Interloop Ltd, which raised Rs5 billion in 2019.

The company reportedly plans to sell new and existing shares within the range of 54-91 rupees per share. According to the media report, the investor orders shall be taken by the company on the 30th and 31st of August, and then the offering price shall be decided.

It must be mentioned that the country has seen eight IPOs in the last fiscal year 2021, where eight offerings were seen by The Organic Meat Company, TPL Trakker Limited, Agha Steel Industries Limited, Panther Tyres Ltd, Service Global Footwear Ltd, Citi Pharma Ltd, and Pakistan Aluminium Beverage Cans Ltd.

The eighth was a preference share issuance of Engro Polymer and Chemicals Ltd. This led to a total raising of Rs31 billion in FY21.

Air Link, which began in 2011, has now become one of the biggest mobile phone distributors in the country. Bloomberg reported that the company’s sales saw a 50 per cent increase in sales to reach 3.6 million phones in FY21.

The company will reportedly issue 60 million new shares and the CEO Muzzaffar Hayat Piracha will sell 30 million from his holdings.

The company reportedly plans to use the raised capital to expand its distribution network. The goal according to the media agency is to expand to up to 150 outlets in 5 years’ time, up from the current 14.

It must be mentioned that the company has recently expanded into the mobile manufacturing facility, which was inaugurated in March by Federal Minister Hammad Azhar.

Air Link has been in the distribution business for a decade working with top smartphone brands like Samsung, iPhone, Huawei, Xiaomi, Alcatel, TCL, Tecno & iTel. The production plant has the capacity to produce 6 million units per year.

Bloomberg mentioned that this recent investment will triple Air Link’s revenue to reach Rs129 billion and net income jumping 500 per cent to Rs9.2 billion by FY25.

Read More: Razak Dawood explains outcomes of PM Khan’s meeting with exporters

Exports and “Make in Pakistan”

The incumbent government of Pakistan is promoting “Make in Pakistan” to increase indigenize production of goods in the country.

Recent during a press conference referring to the new tax breaks Adviser to Prime Minister of Pakistan for Commerce and Investment Abdul Razak Dawood said, “I am hearing, this policy had led to 21 new applicants of mobile manufacturers who want to produce mobiles in Pakistan.”

This will decrease the burden on the textile sector of the country, as textiles accounted for 56.5 per cent of total exports of the country in FY21, and the finance minister in his recent addresses has emphasized “diversification of export portfolio”.

Similarly, PM Imran Khan has formulated an advisory inter-ministerial body to who will be putting forward measures to resolve the issues facing different sectors and facilitate exports from the country.

It will be mandatory for the committee to meet every two weeks and the recommendations will be made to the prime minister, who in turn will hold monthly meetings with the business community representatives for consultations before moving forward with the policy formulation and implementation.

Read More: PM Khan to hold monthly meetings with businessmen to facilitate exports