PSX hosts gong ceremony for BankIslami's Ehad Sukuk II listing

March 20, 2024 (MLN): Pakistan Stock Exchange (PSX) held a gong ceremony at the Exchange to mark the listing of BankIslami Pakistan Limited’s (PSX: BIPL) Islamic financial instrument of Ehad Sukuk II, a fully paid-up, rated, perpetual, unsecured, subordinated, non-cumulative and contingent convertible Mudaraba Sukuk.

The issue size was Rs1 billion, out of which Sukuks of Rs850 million (85% of issue size) were issued to the pre-IPO investors and Sukuks of Rs150m (15% of issue size) were offered to the general public by way of Initial Public Offering.

The issue price or par value of each Sukuk is Rs5,000, with an expected profit rate of 1-month KIBOR + 2.5% per annum to be paid out monthly. The instrument has a perpetual tenor.

The purpose of the Issue was to raise capital towards the issuer’s Additional Tier I for Capital Adequacy Ratio as per guidelines set by the State Bank of Pakistan.

The Bankers to the issue (for the retail portion) were Meezan Bank Limited (PSX: MEBL), United Bank Limited (PSX: UBL), and BIPL.

The designated Market Maker is JS Global Capital Limited and the Issue Agent is Pak Brunei Investment Company.

The public subscription for the instrument took place on February 20 – 21, 2024. The public subscription for the Sukuk was highly successful with the Sukuk being oversubscribed by 56.23%.

While the Sukuks offered to the general public were Rs150m, the total amount received against the public subscription was Rs234.345m.

The applications were received by the designated bankers to the issue with a significant number of applications being received via the PSX and CDC e-IPO system as well.

BIPL President and CEO Rizwan Ata along with the Deputy CEO of BankIslami Imran Haleem Sheikh performed the opening bell ceremony amidst the presence of MD & CEO PSX Farrukh H. Khan and senior management of BankIslami, PSX, JS Global Capital and Pak Brunei Investment Company, to mark the listing of BankIslami Ehad Sukuk II of Rs1bn on the bourse.

Welcoming the guests at the gong ceremony, Farrukh Khan, MD & CEO of PSX, stated, “The listing of BankIslami Pakistan’s Ehad Sukuk II is a valuable addition to the portfolio of Islamic financial securities available at PSX for investors."

The overwhelming response from investors for this Sukuk as depicted by the oversubscription of 56.23% speaks volumes about the investor appetite for such instruments.

“We are confident that this will add greater depth and volume in the market as well as increase the options available for investing in the Islamic financial market in Pakistan, ” he added.

Speaking at the gong ceremony, Rizwan Ata, President & CEO of BankIslami Pakistan Limited, stated, “This is the second fully listed Additional Tier 1 (ADT 1) Modaraba Sukuk issued by BankIslami to further strengthen the Bank's capital. Earlier in 2020, the Bank issued Pakistan’s first listed ADT 1 Sukuk of Rs2bn.”

This is the reaffirmation of BankIslami’s vision and commitment to promote global economic prosperity through the Islamic Financial System and to save humanity from Riba.

The impressive involvement of more than 500 investors in the Sukuk IPO demonstrates the market’s appetite to invest in such rated, fully listed, Shariah-compliant instruments.

The Sukuk offers an attractive monthly profit to its investors, whereas JS Global Capital Ltd, as a designated Market Maker, provides the necessary market liquidity for this listed instrument.

As a subsidiary of JS Bank Ltd, BankIslami has become an integral part of JS Group which is one of the leading investment and financial services conglomerates in Pakistan, he further noted.

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