Lahore (NUT-DESK)

The book-building phase of Octopus Digital Limited’s Initial Public Offering (IPO) has concluded with an oversubscription up to 27 times, according to the Pakistan Stock Exchange (PSX).

The IPO received an overwhelming response from institutional investors and high net worth individuals as the cap price clocked in at Rs. 40.6 per share, 32 percent higher than the floor price of Rs. 30.6. Octopus Digital Limited (“Octopus” or the “Company” or the “Issuer”) translated net participation of Rs. 30.2 billion in total, a little shy of Avanceon’s market cap by Rs. 3.2 billion.

Several brokerages tipped off calls to ‘subscribe,’ which resulted in an investor demand amounting to 745 million in a bid volume against the IPO’s share size of 27 million. The book-building witnessed the participation of 1,757 investors, making it Pakistan’s first tech IPO in the last seven years to get oversubscribed up to the highest ever level of the stock market.

Octopus Digital Limited was incorporated on 29th December 2017, as a private limited company in Lahore, Pakistan. Octopus is a wholly-owned subsidiary of Avanceon Limited and specializes in helping businesses digitize their manufacturing, supply chain, and financial workflows backed by strategic and operational maintenance support services.

Octopus Digital’s parent company Avanceon Limited is an automation consultant. As per Avanceon Limited’s financials, the company recorded a consolidated profit after the tax of Rs. 244.8 million in the first quarter ended on March 31, 2021, down from Rs. 385 million in the same three-month period of the previous year.

Lahore (NUT-DESK)

After the initial success of Male Champions of Change Pakistan with leading Pakistani CEOs joining the global cohort of male leadership supporting gender equality, including CEO Telenor Pakistan, CEO Pepsi Co., CEO Serena Hotels, CEO Pakistan Microfinance Investment Corporation (PMIC), CEO EY Ford Rhodes amongst others, convenor MCC Pakistan and development expert Fiza Farhan meets and inducts CEO Interloop Limited, Navid Fazil.

The signing ceremony took place at Interloop’s Head office in Faisalabad, and was attended by Faryal Sadiq, Vice President Sales & Marketing, and Saira Taimur Khan, GM Strategic HR/Business Strategy, who together have been instrumental in bringing Interloop as Pakistan’s first local large business to the International Champions of Change Coalition representing 270+ CEOs from diverse sectors.

“It gives me great pleasure to welcome Navid Fazil and Interloop Pakistan to this global coalition of CEO’s and leaders working together to understand gender equality issues and lead action to accelerate progress in creating more inclusive and progressive organizations in Pakistan. While it is heartening to have a strong representation of CEO’s representing multinational companies and I thank them for their collective leadership, I feel that long-lasting and far-reaching change always comes from within, when the leadership of local businesses decides to step up beside women; challenging cultural, social and regulatory context to create unstoppable momentum for a gender equal Pakistan” said Fiza Farhan, convenor MCC Pakistan.

The Champions of Change Coalition is a globally recognized, innovative strategy for achieving gender equality, advancing more and diverse women in leadership, and building respectful and inclusive workplaces. In the strategy, men of power and influence step up beside women leaders. They form a high-profile Coalition to lead and be accountable for change on gender equality issues in their organizations and communities – be they local, national or global. The Pakistan Group was established in 2019and includes representatives from various sectors including FMCG, hospitality, telecommunications, information technology and software, micro-finance and sports organizations.

“In Pakistan, promoting gender equity is not only a business imperative, but also a social one. Despite cultural and legal barriers, we have set out to advance women throughout our organization and reap the benefits of a gender diverse workforce. We have made great progress but there is a long way to go and I am committed to continue on this journey helping building a diverse, inclusive and equitable workplace,” said CEO Interloop Limited, Navid Fazil.

Lahore (NUT-DESK)

Lahore (NUT-DESK)

Indus Motor Company Limited (IMC), the makers of Toyota vehicles in Pakistan, has announced that it would invest $100 million in the local production of hybrid electric vehicles. The amount will be invested over the period of three years, said the company in its filing to the Pakistan Stock Exchange (PSX) on Wednesday.

“We are pleased to announce that, based on the incentives provided against certain taxes, duties as announced by the Government of Pakistan through Finance Act 2021, and subsequent Statutory Regulatory Orders (SROs), the company has evaluated and plans to invest an estimated aggregate amount of $100 million, over the next 3 years, for the local production of Hybrid Electric Vehicle (HEV) in Pakistan,” the company wrote in letter to Pakistan Stock Exchange (PSX).

The automotive manufacturing company said that the announced investment shall go towards plant upgradation, extension, localization of parts or components, and production preparation or assembling of HEVs.

“The production by the company shall be done in Port Qasim Authority, Karachi,” the statement added.

The announcement comes after Toyota Motor Corp, IMC’s parent company, said that it expected to spend more than $13.5 billion by 2030 to develop batteries and its battery supply system as the move to hybrid electric vehicles gathers steam. The federal cabinet on Dec.22 had approved Pakistan’s first Electric Vehicle Policy.

The motorcycles and vehicles would be shifted on electric power, while Electric Vehicle Manufacturing Units would also be established in the country. Under the new EV policy, the Sindh Transport Minister Syed Owais Shah back in March 2021 had launched Pakistan’s first electric bus in Karachi۔

Lahore (NUT-Technology)

Pakistan’s leading mobile network operator (MNO) has had yet another strong quarter. Topline at Pakistan Mobile Communications Limited (‘Jazz’) increased by 21 percent year-on-year to cross Rs57 billion in the quarter ended June 30, 2021, as per latest financial results posted by its parent Veon earlier this week. Ebitda grew by 14.5 percent year-on-year in 2QCY21 to reach Rs25 billion, yielding a 43 percent margin. Size and strategy seem to be keeping Jazz in a well-assured position of market leader.

The pace of yearly growth in operating revenues last quarter was the highest than in any quarter since 1QCY19. The key indicator – Average Revenue per User (ARPU) – has perked up to Rs249 per month in the latest quarter, growing by 8 percent over the ARPU during 2QCY20. Both the core mobile services and data revenues have shown handsome growth, with the data business especially prominent. However, ARPU has some way to climb before catching up with the recent peak of Rs272 per month (1QCY19).

Buoyed by strong growth in data subscriptions as well as higher data usage, data revenues at Jazz reached almost Rs21 billion in 2QCY21, showing a 31 percent yearly growth and accounting for 37 percent of overall operating revenues. As of June end, there were over 48 million data customers with Jazz, which is an 18 percent expansion compared to June 2020. Overall ARPU is improving in tandem. Data growth has come in the midst of an active pandemic, as more and more people find it essential to use digital means for the purpose of work, commerce, social interactions, education and remote health. Within the Jazz data user base, the number of 4G users stood at nearly 31 million as of June 2021, recording a massive jump of 61 percent since June 2020.

The corporate strategy is to improve concentration of 4G users in the subscription pie, as data services stand a much more favorable chance of monetization compared to voice and text services. Investments are being made accordingly, as the MNO spent roughly Rs16 billion on capital expenditure during the quarter (10% YoY growth), mainly to expand 4G networks. It is financing its capital expenditures mainly from local credit facilities.

The investment shows in growing 4G coverage, which has increased for Jazz from 56 percent of population area in June last year to 64 percent in June 2021. The “scale” that Jazz has amassed over the years after acquiring Warid and expanding its data networks allows it to better manage the headwinds of low revenue growth and rising operating expenditures that are proving challenging for other operators.

At the close of half-year, Jazz is on a strong footing. Revenues have grown by 16.5 percent to Rs112 billion in 1HCY21, with strong growth in data revenues and double-digit hike in mobile service revenues as well. Ebitda growth in the period was a bit lower at 11 percent to Rs50 billion, as the MNO is making high marketing investments in its brands, mainly JazzCash, which is showing a significant increase in its monthly active users. Let’s see what kind of firepower Jazz brings to the spectrum auction in a few weeks.

Lahore (NUT-DESK)

Lahore (NUT-DESK)

Adviser to Prime Minister for Commerce and Investment Abdul Razak Dawood said that the number of mobile phones manufactured locally has surpassed the number of devices imported during the period between January and July 2021.The production of mobile phones by local manufacturing plants has surpassed the number of mobile phones imports in the country. During Jan-July 2021, the production of mobile phones by local manufacturing plants was 12.27 million and imported mobile phones recorded at 8.29 million.

This trend reflects a positive uptake on PTA’s Mobile Device Manufacturing (MDM) Authorisation regulatory regime whereby local manufacturing within the first year of regime introduction has resulted in production of 12.27 million phones in a short span of seven months including 4.87 million 4G smartphones.

The successful implementation of Device Identification Registration and Blocking System (DIRBS) along with conducive government policies including the mobile manufacturing policy has created a favourable environment for mobile device manufacturing in Pakistan.

It has also contributed positively to the mobile ecosystem of Pakistan by eliminating counterfeit device market providing a level playing field for commercial entities and has created trust amongst consumers due to the formulation of standardised legal channels for all sorts of device imports.

It is important to highlight that the government of Pakistan introduced a comprehensive mobile manufacturing policy to encourage and attract manufacturers to establish their units in Pakistan. PTA in light of the policy issued Mobile Device Manufacturing (MDM) Regulations on January 28, 2021. Till now, 26 companies have been issued MDM authorisation enabling them to manufacture mobile devices in Pakistan.

Lahore (NUT-DESK)

Lahore (NUT-DESK)

The Pakistan Prosperity Index (PPI), after taking a hit in April and May, grew by 13% in June due to the post-lockdown commercial activities.

A recent report by the Policy Research Institute of Market Economy (PRIME) said that the PPI had grown to an all-time high of 135.9 in June, driven by a surge in post-lockdown business activities.  The PPI is an agglomeration of trade volume, lending to the private sector, purchasing power and manufacturing output indices.

The trade volume increased Rs548 billion year-on-year (YoY) and Rs360 billion month-on-month (MoM) with the resumption of business activities and reopening of international markets.

Subsidized borrowing rates by commercial banks showed that the private sector had taken on a lot of credit as well, while, long-term financing facility stood at an all-time high of Rs390.8 billion in June 2021.

In the context of purchasing power, the YoY inflation was reported at 9.7%, while the MoM one clocked in at a negative 0.3%, a manifestation of improvement in purchasing power. The prevalent high levels of inflation are mostly because of a hike in food and energy prices.

Large Scale Manufacturing (LSM) increased by 4.36% MoM. This increase can be attributed to the higher demand emanating from the ease in lockdown, mass vaccination and opening up of business.

In addition, higher production costs fueled by higher energy prices, and supply-side disruptions of raw material all had a fair share in restricting LSM’s output. Notwithstanding, the overall economic outlook, as measured by PPI, seems to be encouraging.

The performance of the economy indicated by PPI is consistent with the latest Business Confidence Survey 2021 by Overseas Investors Chamber of Commerce and Industry (OICCI), which also illustrated the strengthening of business confidence and augmented growth prospects owing to an uptick in the business activities.

With the ease in lockdown restrictions and a mass vaccination drive, the overall state of the economy appeared encouraging and on a right track, the PRIME report said.The report, however, stressed that Pakistan needed to bring down inflation to increase purchasing power/real income of the masses and also to decrease the input cost of the LSM.

The study stressed that addressing the supply-side shocks of basic food items was pertinent to lower food inflation, which was the main cause of rising overall inflation in the economy. These supply-side shocks called for more liberal trade measures and elimination of state intervention in the market, the report added.