Secure Logistics looks to raise Rs600m through IPO

March 18, 2024 (MLN): Secure Logistics Group Limited (SLG) is planning to raise Rs600 million through an Initial Public Offering (IPO), said Arif Habib Limited, the Lead Manager & Book Runner of the IPO.

The issue comprises of 50m shares (18.27% of the total post-IPO) at a floor price of Rs12 per share, with a maximum price band of up to 40%.

In addition to this issue, the company has also signed agreements to sell about 55.7m ordinary shares (20.36% of the total post-IPO paid up capital) at a price of Rs10.5 per share.

The general public portion of the issue comprises of 12.5m ordinary shares (25% of the total issue) at the strike price.

SLG was previously named as Asia Capital Partners (Pvt.) Ltd (ACPL) and was incorporated in 2013.

The primary purpose of the equity capital is to deleverge the balance sheet in an unprecendated high interest rate environment, enhance company’s infrastructure technology base to complete the tech-pivot, initiative expansion into the regional market, and other fleet related efficiencies.

The company operates Logistics Business, Asset Tracking services, and Security services business segments.

Logistics business including long-haul and distribution (short-to-medium haul) segments covering the transportation of goods across the country.

The existing long-haul segment includes bulk (coal, cement, fertilizer, etc.) and containerized cargos (food, appliances, textile, packaging material, etc.) which is served by prime movers and trailers and caters to long distance

The distribution segment covers containerized cargos (food, industrial products, appliances, packaging material, etc.) and beverages and caters to short distance.

Assets Tracking services includes advance fleet management, containers tracking, fuel management solutions and cold chain management.

Lastly, the security services which is done through its wholly owned subsidiary company, involves providing fixed guarding; close protection; cash-in-transit; and supply of electronic & mechanical security equipment.

According to the company's prospectus, its net profit has demonstrated a CAGR of about 29.33%. from CY18 to 2022.

The net profit, in terms of value, has increased from Rs104 million in 2018 to Rs291m in 2022.

The EBITDA margins also exhibit a consistent performance, peaking at 54.44% in year 1 and sustained around 34-40% in subsequent years.

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