According to Topline Securities, the issue’s advisor and book-runner, the book-building process for Citi Pharma’s Initial Public Offering (IPO) finished with a twofold oversubscription.
“The initial public offering received an overwhelming response from institutional investors and high-net-worth individuals, with the strike price of Rs. 32 per share, 14.3 percent above the floor price of Rs. 28,” the country’s largest API maker said in a statement.
Citi Pharma raised a total of Rs. 2.32 billion, making it the second Pharma sector initial public offering in 23 years and the highest IPO of 2021 to date.
“The response to the book building was far superior to our expectations,” Topline Securities’ Mohammed Sohail remarked. Investors gained nearly 90% in a year on the most recent IPO managed by Topline (Organic Meat).
Numerous brokerages issued near-unanimous invitations to’subscribe,’ resulting in investor demand of Rs. 4 billion, compared to the IPO’s book-building size of Rs. 2 billion. Investors bidding at Rs. 32 will receive around 10% of their bid amount.
The remaining 18.1 million shares (25 percent of the total offer size) would be sold to the general public on June 23-24 at the strike price of Rs. 32, the business said.
Citi Pharma CEO Rizwan Ahmed expressed gratitude to investors for their amazing response and committed to continue growing their shareholders’ equity.
“Citi Pharma is one of the most unique companies in Pakistan’s pharma sector, and this expansion will usher in a new era for the company,” remarked Omar Salah Ahmed, Head of Corporate Finance & Advisory at Topline. We wish them the best of luck in the future, as do the investors, who will undoubtedly be a part of an incredible development storey. Investors have responded positively to the prospect of future growth.”
Citi Pharma aspires to be Pakistan’s first fully integrated listed pharmaceutical firm, serving all stakeholders from raw material suppliers to end users of pharmaceuticals.
Citi Pharma increased revenue from Rs. 1,016 million in FY16 to Rs. 3,528 million in FY20, a 36.2 percent compound annual growth rate over five years. The company reported revenues of Rs. 4,015 million in 9MFY21, already exceeding last year’s total.
The company intends to increase its current paracetamol capacity of 3,600 tonnes per year to 6,000 tonnes per year. Additionally, the business wants to expand its existing product range by adding new APIs and pharmaceutical formulations, or finished pharmaceuticals.
Citi Pharma also intends to construct three manufacturing facilities, increasing its total capacity to 200,000 vials/injectables per day, 60,000 bottles of dry powder/suspension per day, 4.2 million capsules per day, and 4.5 million tablets per day. These include dedicated penicillin, cephalosporin, neuropsychiatric, and narcotics medication manufacturing lines.