KARACHI: Matco Foods Limited, one of the country’s leading basmati rice exporters, is later this month planning to raise Rs758 million from listing on the Pakistan Stock Exchange.
The initial public offering (IPO), initially planned for September 2017 got delayed due to prolonged political turbulence and uncertain economic conditions which plagued Pakistan during the second-half of the year.
Other companies such as Inbox Technologies also suspended its plan of holding an IPO in July, and Matco Foods will become the first company to get publicly listed on the stock exchange after a lull of eight months.
In an interview, Chairman Matco Foods Javed Ali Ghori asked the government to provide rice processing sector industry status, give freight subsidies and tax incentives which would boost the country’s exports.
He added the textile sector is being given preferential treatment, provided immense benefits and reiterated that rice sector should be assigned industry sector.
Ghauri said for Pakistani rice sector to compete with India, the export sector of this commodity needs to be provided sales tax subsidy by the government.
The company intends to issue 29.1 million shares at floor price of Rs26 per share. The proceeds from the IPO would be utilized to invest in two rice glucose plants at Port Qasim, Karachi. Matco will be offering 29.143 million shares which constitute 25 percent of the entire post-IPO paid up capital of the company.
Book-building process for this issue is being carried out on the 23-24th of January. 25 percent of shares will be offered to retail investors, whereas successful bidders will be permitted to make bids for the remainder of 75 percent of shares.
In event of 25 percent of retail shares remaining unsubscribed, these shares will be given to successful bidders on pro-rata basis. Money raised via the IPO will be invested to finance expansion of its rice protein plant and rice glucose/syrup plant.
Matco Foods is known for exporting 75 percent of its basmati rice abroad due to increased profit margins . Its basmati rice brand of Falak is considered the bestselling brand from Pakistan and exports its rice to over 60 countries globally.
It is one of Pakistan’s leading agri-business with over fifty-years of experience in the rice industry. It is operating over 5 processing plants, and is considered among the country’s largest rice exporters.