Bawany Air Products sets Rs6bn rights issue at 73% discount

September 16, 2026 (MLN): Bawany Air Products Limited (PSX: BAPL) will issue 599,999,732 new ordinary shares by way of rights, aggregating to Rs5.99bn, at a ratio of 98.765 rights shares for every 100 shares held.

The shares are priced at par value of Rs10 each, representing a discount of approximately 73% to the prevailing market price as of September 2, 2026, the date the board approved amendments in line with SECP directions.

The right issue was approved by the board in meetings held on August 26, 2024 and September 2, 2026, with no dissenting votes. Directors present at the approval meeting included Mohabat Khan, Zahir Khan, Naim Anwar, Muhammad Ali, Huma Javaid, Saba Azam and Suhail Elahi.

Proceeds from the issue will be used entirely for Alman Seyyam Sugar Mills (Pvt.) Limited (ASSML), a wholly owned subsidiary of BAPL (51,114,011 shares, 100%).

ASSML is setting up a 10,000 MT/day crushing capacity plant at Dera Ismail Khan, with major plant components sourced from Pakistan, the UK, Germany, Japan and China.

Half of the proceeds Rs2.99bn will fund capital expenditure for plant and machinery procurement, while the remaining Rs2.99bn will cover working capital needs including inventory, raw material purchases and input costs.

The estimated project cost breakdown for ASSML is as follows:

Book closure for the rights issue is set for September 23, 2026. Dawood Equities Limited is underwriting Rs2.80bn of the issue, while United Bank Limited has been appointed banker to the issue.

Weavers Pakistan (Pvt.) Limited has committed to subscribing 319,712,000 shares worth Rs3.19bn, which would raise its shareholding from 0.5% pre-issue to 26.73% post-issue.

Post-issue, BAPL's authorized share capital will rise from 1,100,000,000 to 1,210,000,000 shares (up 10%), while paid-up capital will increase from 607,502,510 to 1,207,502,242 shares (up 98.765%).

Net assets breakup value per share will move from Rs(6.98) to Rs(13.87), and the gearing ratio from (0.85)% to 0.006%.

Total expenses for the issue include underwriting commission of 1%, bankers' commission of 0.5%, PSX fee of up to Rs13.8m, SECP supervisory fee of up to Rs1.2m, CDC fresh issue fee of 0.144% of new share capital, stamp duty of up to Rs9m, auditor fee of up to Rs0.5m, and other expenses of up to Rs2m.

On the financials, BAPL posted a net loss after tax of Rs54.05m for FY25, compared with a loss of Rs22.62m in FY24 and a profit of Rs59.39m in FY23.

Total assets stood at Rs3.18bn as of June 30, 2025, up from Rs31.31m a year earlier, following the acquisition of ASSML.

Accumulated losses reached Rs104.28m by FY25. The average market price of BAPL shares over the last six months (February 21 to August 21, 2026) was Rs36.36 per share.

BAPL was incorporated in Quetta on August 16, 1978 and is listed on the Pakistan Stock Exchange. Its principal activity is investment in and holding of shares, stock, debentures and securities.

The company had earlier completed an issuance of 600,000,000 shares otherwise than rights to the sponsors of ASSML, which brought ASSML under BAPL as a subsidiary and preceded the current rights issue process.

On risk factors, BAPL noted an under-subscription risk given the rights are priced below the prevailing market rate, though substantial shareholders, promoters and directors have confirmed subscription to their respective entitlements, with the balance to be underwritten.

No outstanding legal proceedings against the company were reported.

The aforementioned information was disseminated through a notification to Exchange.

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