Service Long March Tyres IPO: Company to raise up to PKR 7.8B on PSX to fund car tire plant

Service Long March Tyres Limited has filed its prospectus with the Pakistan Stock Exchange to raise up to PKR 7.8 billion through an initial public offering, the company announced.

The IPO comprises 389.738 million ordinary shares at a floor price of PKR 14.25 per share, representing a 5% stake in the company. Proceeds will fund a new passenger car radial tire manufacturing facility, marking the company's first move beyond truck and bus tires.

What is the Service Long March Tyres IPO share price and offer structure?

The floor price is set at PKR 14.25 per share, with the potential to rise by up to 40% to PKR 19.95, depending on investor demand during the book-building phase. Of the total offer, 75% is allocated to institutional investors and high-net-worth individuals, while the remaining 25% will be available to retail investors at the strike price determined through bidding.

The book-building phase is scheduled for May. Retail investors will be able to subscribe through the PSX e-IPO system and the Central Depository Company's centralized platform once the public subscription phase opens. Arif Habib Limited is acting as lead manager and consultant to the issue.

What will Service Long March Tyres do with the IPO proceeds?

The funds will finance a dedicated passenger car radial tire manufacturing facility, with commercial operations expected to begin in January 2028. Initial annual production capacity is planned at approximately 2 million tires, rising to 2.5 million units in FY2029 and 3 million units by 2030. The project aims to reduce Pakistan's dependence on imported passenger vehicle tyres.

The company described Pakistan's passenger tire market as heavily reliant on imports, presenting a clear opportunity for domestic production. The total project cost for the expansion is PKR 22.5 billion. The IPO proceeds form part of the broader financing plan for that investment.

Who owns Service Long March Tyres and where does it operate?

Service Long March Tyres was incorporated in 2020 as a joint venture between Service Industries Limited, China's Chaoyang Long March Tyre Company Limited, and Myco Corporation Pakistan.

It began commercial operations in March 2022 and manufactures truck and bus radial tires at its facility in SITE Nooriabad, Sindh. The company holds approximately 55% of Pakistan's local all-steel tire segment.

Beyond the domestic market, the company has developed an export presence in the United States and Brazil. Chief Executive Officer Omar Saeed described the IPO as a "pivotal step", citing plans to expand into passenger car tires while contributing to Pakistan's industrial development through localisation and export growth.

Shahid Ali Habib, CEO of Arif Habib Limited, said the transaction reflects growing depth in Pakistan's capital markets and gives investors access to a manufacturing business with expanding scale.