Q1. What is an IPO?
An initial public offering (IPO) is the process when a company issues a stake of its ownership to the public for the first time. Investors who wish to gain ownership in a company subscribe to the company’s shares. Growing companies use IPOs to raise capital for several reasons including funding new projects, diversifying into different industries, increasing production capacity, broadening the shareholding, to restructure its balances in a debt-equity swap, etc.
Q2. What are the benefits of participating in IPOs?
Major benefits for the investors are as follows:
1. Capital gains: If the stock price increases, the investor can sell the stock at a profit which is called capital gain. A capital gain can occur on any security that is sold for a price higher than the purchasing price that was paid for it. These can be either short-term capital gains (with a holding period of one year or less) or long-term capital gains (with a holding period of more than one year).
2. Dividend yield: A dividend is the distribution of reward from a portion of company’s profits and is paid to a class of its shareholders. Dividends can be issued as cash payments, as shares of stock, or other property, though cash dividends are the most common. Investing in companies with good future prospects can lead to high dividend yields.
3. Stake in a company: By subscribing/purchasing shares of a company, an investor gains ownership in the company. The Ordinary shares of a company, if bought in a significant number, allow an investor the legal rights attached to the them, i.e. voting rights in the company.
Q3. What is the general process for participating in an IPO?
There are two ways in which you can participate in an IPO:
1. Book Building Process: The participation is only reserved for High Net Worth individuals (HNWIs) and Institutional investors who set the price of the shares of the company. They subscribe to shares via a Bidding Process. For Interloop, 75% of the total issue of shares that is 81.75 million shares are being offered for the bidding process. This process will take place on March 13th and 14th 2019 at 9.00 a.m.- 5p.m.
2. Public Subscription: It is the process whereby the retail portion of the public issue subscribed by general public at the strike price determined in the book building process. Interloop is offering 25% of the issue size or 27.25 million shares to the general public on March 21 and 22 2019 at 9.00 a.m.- 5p.m or banking hours. However, in the case of e-IPO, the process continues for 24 hours.
Q4. What is a prospectus and where can I find Interloop’s prospectus?
A prospectus is a document published by the company for the benefit of the potential investors. This document includes overview, history and the future prospects of the company. Moreover, it includes financial information necessary to make investing decisions along with forms required for Bidding and Public Subscription.
The link to Interloop’s prospectus is: http://www.interloop-pk.com/wp-content/uploads/2019/03/Interloop-Limited-Prospectus.pdf
Q5. How can an individual investor participate in an IPO?
A retail/individual investor can participate in an IPO through a physical or electronic submission of the Public Subscription Form.
The following is the process to subscribe to shares:
1. A retail investor must have a Bank Account and a Central Depository Company (CDC) investor account or a CDC Sub-account.
2. The CDC account can be opened by submitting the ‘Investor Account Opening Form Individual’. This form can be found on the CDC website; under ‘Downloads’ and ‘Forms’. Additionally, the CDC sub-account can be opened from the TREC holder’s office, by submitting the Account Opening Form which will be provided by the respective TREC Holder.
3. Fill out and attest the application for ‘Subscription of Shares’. This form can be found in the office of TREC Holders of Pakistan Stock Exchange(PSX), Consultants to the issue, registered office of the company and the office of bankers to the issue and their branches. Moreover, it can also be downloaded through the following link: http://www.interloop-pk.com/wp-content/uploads/2019/03/7.-Interloop-Limited-Public-Subscription-Form.pdf
4. Attach attested copy of CNIC (in case of Resident Pakistanis) / NICOP or Passport (in case of Non-Resident Pakistanis). Note: These documents can be attested by any Federal / Provincial Government Gazette Officer, Councilor, Oath Commissioner or Head Master of High School or bank manager in the country of applicant’s residence.
5. A cheque containing the price of shares – calculated on strike price must also be enclosed.
Note: In this IPO the shares applied for can only be in the bundle of 500 shares or multiples of it.
6. The attested Public Subscription Form, attested copy of NIC and cheque for the amount of shares must be submitted to the designated banks clarified in Q7.
7. Retail investors can also use the facility of e-IPO as well. Three banks are offering this facility namely (United Bank Limited (UBL), Summit Bank Limited (SMBL) and Bank Alfalah (BAFL) in the case of Interloop.
Q6. Can I participate in an IPO electronically? what will be the process?
Yes, you can through an e-IPO which is submission of application for subscription of securities electronically through internet, Automated Teller Machines (ATM) and mobile phones. The following two systems are available for e-IPOs:
(i) Centralized e-IPO System (CES):
The Central Depository Company of Pakistan Limited (CDC) in collaboration with 1Link (G) Limited (1Link) has developed a Centralized e-IPO System (CES) through which applications for subscription of securities offered to the general public can be made electronically. CES has been made available in this Issue and can be accessed through the web link (www.cdceipo.com). Payment of subscription money can be made through 1LINK’s member banks available for CES, list of which is available on the above-mentioned website.
(ii) e-IPO facilities by Bankers to the Issue:
Currently, United Bank Limited (UBL), Summit Bank Limited (SMBL) and Bank Alfalah (BAFL) are providing e-IPO facilities to their respective accountholders.
Q7. Which banks are participating in the Interloop IPO?
Banker to the issue for book building
Q8. Which banks are offering e-IPO facility?
The e-IPO facility is being offered by three banks namely United Bank Limited (UBL), Summit Bank Limited (SMBL) and Bank Alfalah (BAFL) in the case of Interloop.
Q9. Will my broker help me participate in the Interloop IPO or do I have to open a new account with some specific broker?
You don’t need a broker/TREC holder’s account to participate in an IPO; only a CDC investor account is sufficient to participate and subscribe to shares as explained in Q6.
Q10. Who should I contact for Bid collection forms and information?
| Contact Officer: | Mr. Muhammad Adnan | Mr. Sameer Khan |
| Direct No.: | 021-32465891 | 021-34302178 |
| Mobile No.: | 0321 821 0505 | 0321-2329835 |
| PABX No.: | 021 111 245 111 | 021-34302171-177 |
| Fax No.: | 021 3242 9653 | 021-34302186 |
| Email: | Adnan.hussain@ismailiqbal.com | Sameer.khan@ismailiqbal.com |
| Postal Address: | Arif Habib Center, 23 MT Khan Road, Karachi | C-132 (B) KDA Scheme#1 Miran Muhammad Shah Road Karachi |
| Lahore | Islamabad | |
| Contact Officer: | - | Mr. Assad Manzur (Branch Operations Manager) |
| Direct No.: | 042-35871730-34 | 051-2829656 & 051-2273819 |
| Email: | - | Assad.butt@hbl.com |
| Postal Address: | Arif Habib Office House No. 16/7-B, Eden Cottages; Main Gulberg 2, Near MCB House Lahore. | Habib Bank Limited (CDA Civic Centre Branch Code-0602); CDA Civic Centre Branch ; Tariq Chambers, Block-2, Melodi Market, Markaz E-6, Islamabad |
| Faisalabad | Peshawar | |
| Contact Officer: | Mr. Muhammad Iqbal Dogar (Branch Operations Manager) | Mr. Muhammad Husnain (Branch Operations Manager) |
| Direct: | 041- 2541137 & 041-2541135 | 091-2210579 & 091-2550012 |
| Email: | iqbal.dogar@hbl.com | muhammad.husnain1@hbl.com |
| Postal Address: | Habib Bank Limited (Circular Road Branch Code-0143); Corporate Centre, Circular Road Branch; P-832/A-1 Block 10,Circular Road Fasilabad | Habib Bank Limited (Peshawar City Branch Code-0223); Peshawar City Branch, Chowk Abrasham Garan 153, Peshawar |
| Quetta | Azad Kashmir | |
| Contact Officer: | Syed Ali Abbas (Branch Operations Manager) | Mr. Tanveer Ahmed (Branch Operations Manager) |
| Direct: | 081- 2822543 & 081- 22822869 Ext. 236 | 05822-920475 & 05822-920475 |
| Email: | ali.abbas3@hbl.com | tanveer.ahmed@hbl.com |
| Postal Address: | Habib Bank Limited (Quetta Complex Branch Code-1649); Quetta Complex Branch, Quetta Complex; 402-A Gulistan Road, Quetta Cantt. | Habib Bank Limited (Main Branch Muzzafarabad Code-0422); Main Branch Muzzafarabad; Khasra # 1275/488, Gillani Chowk, Muzaffarabad Tehsil & Distt Muzaffarabad, Azad Kashmir |
| Gilgit/Baltistan | ||
| Contact Officer: | Mr. Shah Alam (Branch Operations Manager) | |
| Direct: | 05811-450377 & 05811-450405 | |
| Email: | shah.alam@hbl.com | |
| Postal Address: | Habib Bank Limited (Gilgit Branch Code-0107); Gilgit Branch; Shahrah-e-Quaid-e-Azam NLI Market Gilgit Baltistan | |
To download Interloop Prospectus, Bidding form, Bid increase form, Public subscription form, Bid revision form, registration form and further instructions for the bidding process please visit: http://www.interloop-pk.com/book-building/
Disclaimer: For informational purposes only and should not be considered individual investment advice or recommendations to invest in any security, fun or to adopt any investment strategy because market and economic conditions are subject to rapid change.