Fast Cables Ltd., a well-known producer of electrical cables and conductors, is getting ready to list on the public market by selling 25% of its post-listing interest to generate at least Rs 3 billion.
The cable producer from Lahore will launch its initial public offering (IPO) by distributing 83.5 million shares, or one-fourth of its post-IPO holdings. The offering set up using a book-building procedure, with the floor price for each share set at Rs 36.
The chance to bid will be available to institutional investors and high-net-worth individuals, with prospective bids going up to Rs. 50.40 per share, or 40% more than the floor price. This suggests that depending on the degree of interest shown by investors during the book-building period. The IPO proceeds might range from a base of Rs 3 billion to a maximum of Rs 4.2 billion.
During the opening round of the IPO, 75% of the total issue size will distribute among successful bidders. The subsequent presentation of the remaining 25% of the issue to retail investors will occur at the strike price. It will be chosen as the best rate resulting from the book-building process.
The money from the IPO will be used for several important projects. Such as buying new land, creating a cutting-edge structure, installing cutting-edge equipment, and paying off building and machinery components debts.
The floor price multiplied by the trailing 12-month earnings per share results in a price-to-earnings (P/E) ratio 7.81. This P/E ratio sheds light on the relationship between the share price and earnings per share of a company.
Fast Cables’ P/E ratio is marginally higher than Pakistan Cables Ltd. The only competitor currently contemplating an IPO, with a ratio of 6.23.
Fast Cables reported a net profit of more than Rs1 billion for the fiscal year 2021–2022—an astonishing 95% increase from the year before. Its revenue also performed admirably, increasing by 61.6% yearly to reach Rs22.9 billion.
In terms of revenue contribution, K-Electric Ltd (7%), Islamabad Electric Supply Company Ltd (4.7%), and Multan Electric Supply Company Ltd (3.9%) were the top three clients in the previous fiscal year.
The company’s draught prospectus is available for public inspection and comment until August 17 on the website of Stock Exchange. This is a crucial step toward the impending public release of Fast Cables.