Pakistan’s Leading Tyre Manufacturer, Panther Tyres Ltd, is going for an Initial Public Offering to raise Rs. 1.8 billion through issuance of 40 million shares at minimum price of Rs. 47/share.
Panther Tyres Limited is Pakistan’s leading manufacturer of Tyres & Tubes, operating under the brand name ‘PANTHER’ in the domestic and export market for over 35 years. Incorporated in 1983, its plant is situated at 29.5 KM Sheikhupura Road, Sheikhupura. PTL is principally engaged in the business of manufacturing a wide variety of
Panther Tyres is an established brand in non-radial tyres and tubes for a wide range of vehicles including Motorcycles, Three wheelers/ Rickshaws, Scooters, Agricultural locomotives mainly Tractors, Passenger Cars, Truck & Buses, LTVs and Jeeps. Panther Tyres has roughly 30% Market Penetration which makes it one of the most established brands in its segment.
Interesting to note is the fact that PTL’ Annuals sales were even higher than Sales of General Tyres(Pakistan’s only Car Tyre Manufacturer).
Need for an IPO
PTL is currently in mid of an aggressive expansion plan where it is expanding its capacities by roughly 30%. Current Capacity Utilization stands around 90%. Sales growth over the last five years has remained aggressive as it witnessed an average Sales growth rate of 20% annum with average gross margins of 14%.
PTL intends to increase its exports primarily to African countries where it see a vast potential.
The total cost of Expansion is estimated at roughly Rs. 3 billion, where Rs. 1.4 billion is estimated to come from IPO, Rs. 1.15 billion from Bank Loans while rest of funding from internal cash flows.
Panther Tyres IPO Dates, Outlook, Price
While COVID-19 has hit the world and Pakistan’s economy has suffered as well, Panther Tyres business has witnessed no impact. The Sales growth of the company looks promising keeping in view sales of Motorcycles and Rickshaws in the country. Moreover, the increase in Export Sales will add value to the company.
Panther Tyres prospectus for IPO has been approved by Pakistan Stock Exchange, the expected date of Panther Tyres IPO is 27th and 28th of January 2021.
PTL has set a floor price of Rs. 47/share which comes at 1.3x its book value. It is expected that keeping in view the past financial performance of the company and growth potential, the Share price may rise up to Rs. 60/share in Book Building which is scheduled for 27 & 28 January-2021.
Initially, 75 per cent of the issue size (30 million ordinary shares) will be allotted in Book Building, and 25 per cent of the issue (10 million ordinary shares) will be offered to retail investors later on.