Pakistan's Citi Pharma plans unit's IPO

Pakistan's Citi Pharma plans unit's IPO

Citi Pharma’s Rs2.33 Billion IPO Marks Significant Milestone in Pakistan’s Pharmaceutical Sector

Citi Pharma Limited (CPL), a leading manufacturer of Paracetamol in Pakistan, successfully raised Rs2.33 billion through its initial public offering (IPO) by selling 72.69 million shares at Rs32 apiece on the Pakistan Stock Exchange (PSX). The share price, determined via a two-day book-building process (June 15–16, 2021), ended 14% above the initial floor price of Rs28, reflecting strong investor confidence. The auction, which allowed prices to rise up to 40% from the floor price (capped at Rs39.2), attracted total bids of Rs4 billion, resulting in a two-fold oversubscription.

This IPO marks the first pharmaceutical sector offering in three years and the second in 26 years, underscoring its significance as a rare entry in the market. Topline Securities, the lead manager, noted that institutional and high-net-worth investors initially secured 75% of the shares (54.52 million), with the remaining 25% (18.17 million) reserved for retail investors in a subsequent phase scheduled for June 23–24, 2021. Unsubscribed retail shares may be reallocated to institutional investors, ensuring full distribution.

CPL’s revenue currently relies heavily on Paracetamol, but the company plans to expand its capacity from 3,600 to 6,000 tons annually and diversify into new active pharmaceutical ingredients (APIs), including Ascorbic Acid and Hydroxychloroquine Sulfate. The prospectus highlights increased demand for Paracetamol during the COVID-19 pandemic, alongside rising health awareness and spending, as key drivers for growth.

Financially, CPL reported a net profit of Rs168.54 million in the first half of FY21, up from Rs145.63 million in FY20. The company’s client base includes major pharmaceutical firms such as GlaxoSmithKline Pakistan and Novartis Pharmaceuticals Pakistan, positioning it within a robust supply chain.

The IPO, the largest among the last three initial public offerings in Pakistan, reflects growing investor appetite for sector-specific opportunities amid strategic expansion plans. CPL’s shares are expected to be listed on the PSX, offering public trading and enhancing market liquidity.

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