Barkat Frisian Agro Limited (BFAGRO) made an impressive debut on the Pakistan Stock Exchange (PSX) on Friday, March 7, with its shares surging by the maximum allowed 10%. At the opening of the trading session, BFAGRO’s share price hit the upper limit of Rs20.02 per share, reflecting a significant increase of Rs1.82 compared to its Initial Public Offering (IPO) price of Rs18.2. The positive market reception was in line with expectations, and the stock traded at its cap price almost immediately after the market opened at 9:17 am.
This robust performance came as no surprise to market analysts and insiders. Shahid Ali Habib, the CEO of Arif Habib Limited (AHL), the lead manager to the IPO, noted that BFAGRO’s share price hitting the upper limit was “expected.” According to Habib, the stock had been trading off-market at even higher levels, reaching Rs24-25 before the official debut, fueling optimism about the company’s strong market prospects.
On the first day of trading, BFAGRO’s stock saw the exchange of 10,642 shares at the capped price, while the benchmark KSE-100 Index also saw a significant uptick, rising by 867 points to hover around 114,580 points by 9:31 am. The surge in BFAGRO’s share price signals strong investor confidence in the company’s future, following a successful IPO process.
The company, a joint venture between the Frisian Egg Group of the Netherlands and Pakistan’s Buksh Group, was formally listed at PSX in a gong ceremony held earlier in the day. This marks a significant milestone for the company, as it moves to establish itself in the public market.
The IPO, which was launched in February 2023, had already generated a buzz among investors. During the two-day book-building phase on February 17-18, the company raised Rs1.23 billion by selling 67.74 million shares at the floor price of Rs13 each. The IPO was heavily oversubscribed, attracting total bids worth Rs4.2 billion, or nearly 4.77 times the issue size, which further fueled investor enthusiasm. The offer was priced at the maximum Rs18.20 per share after the book-building process, successfully exceeding the company’s minimum equity target of Rs880 million.
In addition to its IPO success, Barkat Frisian plans to use the proceeds to expand its operations with the construction of a new production facility in Faisalabad. This new facility will be a key part of the company’s strategy to strengthen its foothold in Pakistan’s growing market for pasteurised egg products, which are widely used in the food service (HoReCa), sauces, mayonnaise, and baking industries.
Founded in 2017, Barkat Frisian has carved out a niche in the production of high-quality pasteurised egg products, including whole eggs, yolks, whites, and various derivatives. The company caters to a wide array of industries, such as the hotel, restaurant, and cafe sector (HoReCa), sauces and mayonnaise manufacturers, and the baking and confectionery market. With its solid product offering and strategic partnerships, Barkat Frisian is well-positioned to capitalize on the growing demand for pasteurised food products.
The company’s IPO performance adds to the momentum of recent IPO activity on the PSX, following the success of Zarea Limited, which raised Rs1.03 billion by selling 62.5 million shares just the week before. Both IPOs have sparked renewed investor interest in Pakistan’s capital markets, signaling optimism about the country’s economic future and its increasingly dynamic corporate sector.
In conclusion, the strong debut of Barkat Frisian Agro Limited on the PSX serves as a testament to investor confidence in the company’s future prospects. With a solid foundation in the food products sector and plans for expansion, the company is poised for continued growth and success in Pakistan’s capital markets.