In a landmark development at the Pakistan Stock Exchange (PSX), the Initial Public Offering (IPO) of Barkat Frisian Agro Limited (BFAL) has concluded with an overwhelming oversubscription of 16.25 times. The book-building process for the IPO generated an exceptional response from institutional investors and high-net-worth individuals, resulting in a strike price of Rs 18.2 per share, which is 40% higher than the floor price of Rs 13.
The total funds raised by BFAL amount to an impressive Rs 1.23 billion, marking a significant milestone as it becomes the first pasteurized egg company to go public in Pakistan. The IPO attracted an enormous demand, with investors bidding a total of Rs 14.25 billion—an amount far exceeding the IPO’s book-building size of Rs 1.23 billion. This intense demand reflects the growing investor interest in unique and innovative industries, particularly those that are expanding in Pakistan’s rapidly developing food sector.
The success of the IPO can largely be attributed to the favorable recommendations from various brokerage firms, who issued near-unanimous calls to “subscribe.” As a result, BFAL saw an unprecedented level of interest, underscoring the confidence institutional investors and high-net-worth individuals have in the company’s future prospects. This impressive subscription level has set a strong precedent for future IPOs in Pakistan, particularly in the food and agriculture sectors.
As per the allotment process, successful bidders will be provisionally allocated 75 percent of the issue size, which amounts to 50,801,250 shares. The remaining 25 percent of the shares, or 16,933,750 shares, will be offered to the general public through a retail subscription scheduled for the 24th and 25th of February. This allows retail investors the opportunity to participate in the company’s growth and share in the potential returns.
Arif Habib Limited, a leading investment banking firm, served as the lead manager and book runner for the IPO. The company’s successful entry into the stock market is expected to further raise its profile, both in Pakistan and internationally, within the food production and processing industry.
The funds raised through this IPO will be directed toward expanding BFAL’s production capacity, particularly through the construction of a state-of-the-art production facility at the Special Economic Zone in Faisalabad. This new facility will play a crucial role in meeting the growing demand for pasteurized eggs in Pakistan. Currently, BFAL operates a manufacturing plant in Karachi, but the new facility will increase the company’s pasteurized egg production capacity by an impressive 71 percent. The expansion will enable BFAL to produce 29,000 tons of pasteurized eggs annually, up from the existing capacity of 17,000 tons per year.
This expansion is a strategic move to cater to the increasing demand for high-quality, safe, and hygienic egg products in both domestic and international markets. With a growing population and an increasing focus on food safety, pasteurized eggs are becoming a staple in many households and food industries across Pakistan. BFAL’s commitment to increasing its production capacity aligns with the rising trend of demand for such products, positioning the company for further growth and success.
The oversubscription of Barkat Frisian Agro Limited’s IPO not only highlights investor confidence in the company’s future but also marks a significant achievement in Pakistan’s growing equity market. The successful completion of this IPO sets a positive precedent for future offerings, especially in the food and agriculture sectors, and emphasizes the potential for innovation and growth in Pakistan’s economy.