Octopus Digital is all set to get listed on the Pakistan
Stock Exchange (PSX).
The tech firm is looking to raise a minimum Rs793million by
offering 27.4 million shares at a minimum price of Rs29 per share in the
Initial Public Offering (IPO).
It is a wholly-owned subsidiary of Avanceon Ltd. The company
plans to develop 29 independent intellectual properties under different
categories from which the company will be providing two main offerings –
Topware and Omni Connect.
The book building will be held on September 9 and 10. The
price will be decided with institutions and high net worth individuals bidding
via the Dutch auction method. The general public will be able to buy the
company’s shares on September 16 and 17.
What is the Dutch auction method?
In the Dutch auction method, coming down from the highest
price in the bidding process, and the price where the total number of shares
are completely sold become the strike price.
For instance, if there are bids of 10 million shares at
Rs40, for another 10 million shares, there are bids at Rs35 and bids for
remaining 7.4 million shares is at Rs30, then the strike price will be Rs30.
All of the top bidders will also receive the shares at Rs30. The stock will
also be offered to the general public at this price as well.
Successful bidders will be provisionally allotted only 75%
of the issue size, which is 27.4 million shares in this case, and the remaining
shares will be offered to retail investors at the strike price later.
How much Octopus Digital is expected to make?
Octopus Digital is looking to raise at least Rs793million in
the IPO at a base price of Rs29. However, based on the interest expressed by
investors during the book-building process, the strike price can rise by as
much as 40% (Rs40.6/ share), thus helping the company collect Rs1.1 billion.
According to AKD Securities, Topline Securities and a senior
Research Analyst Adnan Sami Shaikh, the stock can be subscribed at its ceiling
price of Rs40.6.
What the company wants to do with the money?
The company requires funding to develop Digital Dashboard
platforms to upgrade its services suite to industry 4.0, which is an industrial
revolution that includes automation of traditional manufacturing and industrial
practices. The industry 4.0 refers to a new phase in the industrial revolution
that focuses heavily on interconnectivity, automation, machine learning and
real-time data. The target markets for these services will be Pakistan, Middle
East and United States.
How to buy Octopus Digital shares?
General investors can apply to buy shares on September 16 and 17 through United Bank Limited, Meezan Bank Limited, Faysal Bank Limited, Soneri Bank Limited, Allied Bank Limited, MCB Bank Limited and Habib Metropolitan Bank.
They can also buy stocks by submitting electronic and physical applications. Online applications can be submitted through PSX’s e-IPO system and the Centralized E-IPO system of the Central Depository Company of Pakistan Limited. PES and CES can be accessed via the web link https://eipo.psx.com.pk, www.cdceipo.com.