Fast Cables' IPO oversubscribed by 1.57x

May 16, 2024 (MLN): The book-building process of Fast Cables Initial Public Offer (IPO) has concluded with an oversubscription of 1.57 times, AKD Securities Limited, the book runner of the IPO informed today.

This oversubscription reflects the market's confidence in Fast Cables while the robust demand amounts to Rs4.7 billion against issue size of Rs3bn.

The strike price settled at Rs24.45 per share, above the floor price of Rs23.5, reflecting the strong appetite for the company's shares.

The principal purpose of the issue is to invest in capacity enhancement, specifically in buildings, plants, and machinery. Additionally, a portion of the funds will be allocated towards repaying loans taken for building construction and machinery imported.

New land will be acquired for the above-mentioned purpose, buildings will be constructed and new plant & machinery with advanced technology will be installed.

As the name suggests, this local manufacturer of top-quality electrical cables and conductors is currently holding its position in the Pakistani cable market with an annual production capacity as of June 30, 2023, of copper products stands at 8,400 metric tons while for aluminium products 13,800 metric tonnes.

It is also important to mention that the company is a pioneer of Catenary Continuous Vulcanization (CCV) Lise sene Technology & Aluminium Alloy plant in Pakistan.

The CCV line's cutting-edge technology grants the product a remarkable lifespan of over 40 years, guaranteeing exceptional durability and unwavering reliability.

The positive outlook is backed by the rising demand for electricity consumption each year along with the growing population.

It is important to mention that with each passing year number of houses, industries and other infrastructure is built adding more constraints to the existing supply of electricity.

During the FY22, 12 Generation Licenses were issued by NEPRA for a cumulative 201.42 MW capacity and 7,032 Licenses of a cumulative 243.43 MW were issued for net metering-based systems to the consumers in different DISCOs.

The main purpose is to induct new capacity to displace the costlier options and to cater growing need for electricity in Pakistan.

The induction of new power generation capacity through different technologies will lead to a higher demand for cables and conductors in future when these all projects are implemented and become operational.

Moreover, the rising adaptability of solar plants is a golden opportunity for Fast and to capitalize on this, the company has increased the solar cable capacity by 400% and will continue to expand aligned with demand growth in the sector, according to the management.

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