Finalffcl Ipo

8/8/2019 Finalffcl Ipo

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FATIMA FERTILIZR COMPANY LIMITED


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INTRODUCTION

FFCL incorporated inPakistan on December 24,2003.

The registered office of the company is in Multan.

Fatima Group and Arif Habib Group together.

The main object


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INITIAL PUBLIC OFFERING

IPOs of 200 million ordinary shares (10% of total

paid up capital)

150 million were for book building (later 142.6

Million were offered) and 50 million for general

public in January 2010.

The largest public offering in the last two years.


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THE PROJECT

Total cost of the project isUS$701 million (capitalcost of per tons capacity

of the project come toUS$443) equivalent toPak rupee 59.29 billion

Financed through debt ofPKR 33.00 billion andequity/ subordinate loansof PKR 26.24 billion.


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UNDERWRITERS

Underwritten book building portion of 142.6 Million

Ordinary shares of issue within 2 working days of the

closing of the bidding period.

Reason for selecting AHSL.


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UNDERWRITERS

The public portion has been underwritten as follows:


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UNDERWRITING COMISSION

Commission 1% on the amount of book

building portion underwritten by the book

runner.

Public portion commission of 1% and take up

commission of 1.5%.


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ESTIMATED EXPENSES


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BOOK BUILDING

Fatima Fertilizer offered 142.6 million shares

to institutional investors

From January 11 to January 13, 2010 Placed bids for 276 million share on first day

Final day results of bidding tell that

I

nstitutional investors offered to buy 606.4million shares


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BOOK BUILDING

According to the book runner and manager of FFCL, thecompany received a total of 1,247 bids. Out of the total,1,020 bids were received from Karachi, 177 from Lahoreand remaining 50 from Islamabad.

Strike price of PKR14.1/share (41% over the base price).

The trading range of the stock in between PKR 12.3- 15.9.


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PUBLIC SUBSCRIPTION

Date of public subscription was January 29, 2010- January30, 2010.

Offered for general public = Rs 13.50/-- with 4.56% discount

to strike price

The IPO oversubscribed by 1.46 times and total moneyreceived by the company was Rs728 million

Total applications received were 3276 of which 2682 wereof 500 shares while the rest were in multiples of 500.


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OFFER PRICE AND FIRST DAY OF

TRADINGOffer price basically the floor price= Rs 10/--

Strike price established through book buildingFor Institutional investors = Rs 14.10/--

For general public = Rs 13.50/-- with 4.56% discountto strike price

Provisional trading started on 22nd Jan 2010

While formal trading started on Monday 8th March

2010 with following pattern observed on 1st

day of trading i.e. March 9th, 2010Opening price=Rs.12.96/- per share

Closing price=Rs. 13.34/- per share


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ANALYSIS OF FATIMA FERTILIZER

STOCK

BEFORE IPO (BUSINESS RECORDER ( 11-01-2010))

Four different types of fertilizers plants setup - urea,

CAN, NP and NPK

Shortfall of nitrogen fertilizer in the domestic market

so firm will sell entire urea produced.


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STOCK Hidden facts regarding CAN, NP and NPK plants production

capacity

The products demand in the last three years around 0.34

million tons per annum, which defies the logic of having 0.87million tons of CAN capacity

Demand for NP and NPK has been in the range of 0.44 milliontons

The rationale behind the decision to have capacities over andabove the demand requires some serious explanation.


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STOCK

A rosy picture of its future predicting

No indication of the exports of its products

High debt equity ratio of 56:44, any drop in gross

profits caused by the weak fundamentals is bound to

hit the bottom line hard because of the high financial

charges which have to be born irrespective of sales

revenue.

Favorable point: Expertise and strong sponsor


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STOCK

AFTER TRADING

The first day of trading and Investors high hopes

Out of total 404 active stocks, 223 stocks advanced,

170 stocks declined

11 stocks closed unchanged.

Highest volumes were witnessed in Lotte Pakistan at

27.78 million closing at Rs11.11 with a gain of Rs1, Followed by Fatima Fertilizer at 20.17 million closing

at Rs13.34 with a gain of 38 paisa


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Continued analysis


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THANKS FORLISTENING PATIENTLY

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