Huawei, Xiaomi distributor in Pakistan to sell 90 million shares

Islamabad: A big cell distributor in Pakistan, dealing in Chinese giants Huawei and Xiaomi will be selling 90 million shares at a base price of Pakistani Rs 65 per share, the company said.

Airlink Communication Ltd, one of the largest in Pakistan in cell distribution, said it was set for the biggest ever Initial Public Offering (IPO) of Pakistan’s private sector.

The company will be selling 90 million shares at a base price of Rs65 per share, which will amount to Pakistani Rs 5.85 billion in total at base price.

The book building will be held on August 30 and 31 and the exact price will be decided with institutions and high net worth individuals bidding via the Dutch auction method.

The general public will be able to buy the company’s shares on September 6 and 7. JS Global Capital Limited is the consultant and book runner to this issue.

Successful bidders will be provisionally allotted only 75% of the issue size, which is 90 million shares in this case, and the remaining shares will be offered to retail investors at the strike price later.

Airlink will raise at least Rs 5.85 billion at a base price of Rs 65. But based on the interest from investors during the book-building process, the strike price can rise by 40% (Rs 91 a share), thus helping the company collect Rs 8.2 billion.

According to Alfalah CLSA Research and BMA Capital Research, the stock can be subscribed at its ceiling price of Rs 91. Meanwhile, AKD Research has told investors not to buy the share above Rs 80.

Airlink has started manufacturing TCL, ITel and Tecno cell phones in Pakistan. The company has an annual capacity of manufacturing 4.8 million mobile phones at its plant in Lahore. The company is expected to reach full capacity by December this year.

The company is one of the largest distributors of mobile phones in Pakistan with a nationwide network linked with over 1,000 wholesalers and 4,000 retailers.

Airlink started its distribution of smart phones in 2012 and currently is a distributor of Samsung, Huawei, Xiaomi and Apple. Airlink’s revenue grew from Rs 140 million in 2012 to Rs 47.3 billion by the end of June 2021.

Airlink has now started assembling smart phones in Pakistan and has already opened 14 retail stores, including in high-end malls such as Dolmen and LuckyOne in Karachi and Packages, Emporium and Xinhua malls in Lahore.

A company spokesperson said the government’s initiative to promote assembling and consequential exports from Pakistan through the new Mobile Device Manufacturing Policy was the reason for it entering the manufacturing business.

The duty and taxes of about 20% to 25%, which was on a complete set of smart phones, has been brought almost to zero if companies import semi-knocked down units (components) and assemble them in Pakistan, according to the company.