PSX Expecting Its First Tech IPO in 5 Long Years – Octopus Digital Limited
KARACHI: Although tech has shown a lot of promise in recent years, there aren’t enough tech companies to show for it. So much so that there has been no initial public offering (IPO) of a tech company in the previous five years.
Pakistan Stock Exchange (PSX) is set to witness an initial public offering (IPO) from a tech company after five long years with BMA capital management company to lead the offering, a PSX analyst explained on Tuesday.
Avanceon Limited, the automation expert, plans to offer its subsidiary Octopus Digital Limited to the public at the beginning of next year. The move will see the company rack up as much as Rs1.5 billion, according to analysts.
Notably, the last such move by a tech company was by Systems Limited back in 2014. There has been no such IPO since then.
IPO Can Bring In Millions For Growth
Systems Public Limited managed a whopping $5.2 million from over 8,000 new subscribers.
Software is a bit underrated in the market, but the interest was overwhelming even back in 2014. The public offering saw the share offers oversubscribed. Before Systems, there were only three Tech public companies on the KSE (Karachi Stock Exchange). These were Netsol, TRG, and Avanceon Limited.
Avanceon Limited has shortlisted BMA Capital Management Company to spearhead the new IPO.
“Octopus Digital Limited aims to tap into a large investor base to raise capital and provide Pakistan’s capital market an opportunity to invest in smart industries,” a statement from Avanceon Limited said.
“Octopus Digital Limited is the result of three decades of experience and expertise within the industrial automation space. The newly formed entity helps businesses digitalize manufacturing, supply chain, and financial workflows backed by strategic and operational maintenance support services.”
The new industrial revolution in the world has taken the digital world by a storm, and Octopus Digital will be the first Pakistani Company to bring waves of the revolution to Pakistan.
Efforts For A Digital Revolution
Recent changes by SECP have seen a wave of new companies coming in, but the number of IPOs has stayed low. The primary equity market is raising more revenue than ever before.
There were only three notable IPOs in the years 2016, 2017, and 2018. The numbers remained low compared to the scheduled issuance at the start of each year.
The Ministry of Information Technology and Telecommunication along with the government are giving heavy incentives to the IT sector.
The central government aims to touch the $10 billion mark for IT exports by 2023. More than Rs. 6 billion have been suggested for IT promotion by the planning commission, but it is yet to be approved.
Our neighboring Asian countries are giving extensive incentives to their IT sector. IT has been ravishing in these countries, they include, Philippines, China, Bangladesh, and India. Our government is shaping the IT support package similarly to support the growing IT industry in Pakistan.