September 6, 2021 (MLN): More than halfway through the calendar year, there has been a list of companies that have tapped capital markets. After witnessing a remarkable turnaround in its fortunes, the domestic technology sector also jumped on the bandwagon as Octopus Digital Limited (ODL) is all set to hit the local bourse, with its book building process scheduled on Sept 09, 2021.
Amid accelerated digitization and significant investment opportunities, this will be the first technology company to conduct an IPO in Pakistan in more than seven years.
ODL, a wholly-owned subsidiary of Avanceon Limited, is a technology service-oriented company that provides AMS (After Market Support) services to its client, both locally and internationally.
The company's primary business is to offer ‘Infrastructure as a Service (IaaS) solutions, online plant monitoring, plant maintenance, technical training, trading of related software, digital dashboarding, cloud services, advanced data analysis, predictive analysis and risk management.
The subsidiary is planning to raise Rs793million by issuing 27.35mn shares through this IPO at the floor price of Rs29 per share. The money raised through this will be used by the company to fund the development of various Digital Dashboard platforms to upgrade its services suite to industry 4.0, which is an industrial revolution that includes automation of traditional manufacturing and industrial practices, a report by Abbasi and Company noted.
For the planned IPO of its subsidiary, ODL, Avanceon Limited mandated BMA Capital Management Limited (BMA Capital) as its sole financial consultant/advisor, the notice to PSX said.
Industry 4.0 refers to a new phase in the industrial revolution that focuses heavily on interconnectivity, automation, machine learning, and real-time data. The target markets for these services will be Pakistan, the Middle East, and the United States. IT/ITeS Sector is one of the fastest-growing sectors of Pakistan contributing about 1% of the GDP of Pakistan at about $3.5 billion. It doubled in the past four years and experts expect it to grow a further 100% in the next two to four years to $7 billion, the report cited.
In accordance with Pakistan Vision 2025 and the Digital policy of Pakistan 2018, the ICT industry size is targeted to reach $20 billion by 2025. With the help of its intellectual properties, ODL is planning to tap this growing market. ODL will initially develop 29 dashboard applications across 5 categories which are i) Industry vertical, ii) Utilities, iii) Fuel retail, iv) Maintenance and v) Function, said Muhammad Shahroz, Equity Research Analyst at Insight Securities.
On top of this, the company will design two platforms which are Topware and OmniConnect. Topware will help companies in analyzing data and enable them to extract meaningful insight for prediction & prescription while, OmniConnect will help in collecting data from multiple sources, compute them and perform KPIs, he noted.
Octopus Digital specializes in helping businesses digitalize their manufacturing, supply chain, and financial workflows backed by strategic and operational maintenance support services. It is a unique enterprise that will fill the technology chasm facing the industrial sector in Pakistan, said Avanceon in October 2020.
Not to forget, partnership with Microsoft gives an edge to ODL over these international players which do not possess Microsoft’s cloud. The partnership will benefit ODL in exploring new industrial markets as the company will reap benefits from Microsoft’s IP Co-Sell initiative.
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