KARACHI: The Organic Meat Company Limited (TOMCL), a major halal meat exporter to the United Arab Emirates (UAE) and Saudi Arabia, received an overwhelming response from investors seeking to benefit from its initial public offering at the Pakistan Stock Exchange on Tuesday.
During the book building process, the company received Rs 1.4 billion of bids since the overall investor interest went up to 68.1 million shares while only 40 million were offered by the company.
“The strike price of the issue was Rs 20, which was Rs 2 higher than the floor price that amounted to Rs 18 per share,” Topline Securities, the IPO adviser, said in a statement.
“Despite the economic impact of the coronavirus pandemic, investor response was much better than our expectations,” Muhammad Sohail, CEO of Topline Securities, told Arab News.
“The IPO signaled there is enough liquidity in the capital market for companies with quality shares, right prices and good management,” he continued. “Even in such a difficult economic situation, leading local and foreign investors, along with high net worth individuals, participated in the bidding.”
According to the management of the meat company, the process will help the organization generate Rs 800 million through this offering of 40 million shares which constitute 35.8 percent of the total shareholding.
“The proceeds will be utilized to set up two new facilities to process offal in Karachi. The first facility will be set up in Qur’angi for locally procured raw offal while the second will be set up in the export processing zone [of Port Qasim] to process imported raw offal for export purposes,” Faisal Husain, CEO and founder of the organic meat company, told Arab News. “We plan to focus on markets in the Far East with these offal processing facilities.”
The company exports raw lamb, goat, sheep, cow, buffalo and bull meat to customers around the world with a major focus on the UAE and Saudi Arabia. Its post-COVID-19 exports from Pakistan stands at $3.9 million of which $3.7 million worth of products have been exported to the UAE while $62,615 worth of meat has been taken to the kingdom, the organization’s export data between March 21 and May 31, 2020, reveal.
“At present, 95 percent of our products are going to the two Arab states amid the pandemic. But even otherwise, 50 to 75 percent of our exports are earmarked for the UAE. During the last four months, our complete focus has been on the Middle East,” Hussain said.
He also sounded optimistic that Pakistan could increase its market share in the Middle East and give a tough competition to Indian businesses. “We have greater export capacity and better variety than India since our eastern neighbor only exports buffalo meat,” he said.
The Pakistani meat company is the only sector player in the country allowed to export to the UAE and KSA via sea routes. This significantly lowers its transportation cost in comparison to its competitors and ensures greater market access and penetration.
Last year, the firm witnessed a major increase in the export of vacuum packed chilled beef and fresh chilled meat to the UAE and Saudi Arabia. It also started selling frozen beef cubes to Maldives in big numbers.
The company now plans to expand its export base by adding China, Russia and other states in the region. Based on its existing relationships with Chinese meat importers, it hopes to become the first Pakistani company to sell meat in China.
“China is such a big market that it can probably consume the entire production in our country. It is the biggest importer and producer of beef in the world. The government is currently working to create a conducive business environment for firms like us by removing some of the trade hurdles. We are half way through and hope to enter that market within a year.”
