Pakistan’s equity market sees surge in IPO activity after a slow three years

After a sluggish three years, the Pakistan Stock Exchange (PSX) experienced a significant rise in Initial Public Offers (IPOs) in 2024, with seven IPOs compared to just one in the previous year.

The total amount raised from investors through these seven offerings reached PKR 8.4 billion, the highest level since 2021 when eight offerings raised PKR 19.9 billion, according to an analyst at Topline Securities.

The Pakistan market outperformed the global trend, which saw a slowdown in IPO activity. According to Ernst & Young (E&Y), a total of 870 IPOs were recorded globally until September 2024, raising $78 billion compared to 983 IPOs raising $101 billion in the same period last year.

All the offerings this year were oversubscribed, indicating strong investor interest. The analyst attributed this success to macroeconomic stability under the IMF program, positive market sentiment, high liquidity, falling interest rates, and political stability, which encouraged equity investment.

In 2024, new listings on the Main Board included Secure Logistics (SLGL), TPL REIT Fund-I (TPLRF1), International Packaging (IPAK), Fast Cables (FCL), and BF Biosciences (BFBIO). Meanwhile, Mughal Energy (GEMMEL) and Burj Clean Energy (GEMBCEM) were added to the GEM Board.

Analysts predict that more IPOs will come to the market in 2025 as market valuations have significantly increased. Additionally, the abundant availability of liquidity, amidst a shift from fixed income, is expected to encourage more companies to offer shares in the market.