Direct Listing on PSX An evolving pathway to the capital market

What is Direct Listing?

For the evolving business environment of today where companies need to adapt to the altering demands of customers, human resources and the market, listing on the Stock Exchange is the right way forward for such companies. In a new offering introduced by Pakistan’s capital market, companies can now list on the Stock Exchange without going through an IPO. This is called Direct Listing.

Who should opt for Direct Listing?

Direct Listing is for those companies who wish to list and divest the stake of their existing shareholders rather than raise additional capital. Companies with a paid-up capital of not less than Rs 200 million can avail the opportunity of Direct Listing.

Companies that want to avoid underwriters and Lock-In periods for their listing process can make use of Direct Listing. Moreover, Direct Listing is an ideal platform for those companies that are consumer-facing with a strong brand identity, have easy to understand business model, and do not require substantial additional capital.

Difference Between an IPO and Direct Listing?

When a company decides to list on the Stock Exchange, one of the reasons for it may be that investors want to partially cash out. While both an IPO and Direct Listing provide this option, however, in an IPO, hiring a Consultant-To-the-Issue (CTI) and other third parties is mandatory. This is optional in Direct Listing. Also, an IPO has a Lock-in period of 2 years, while Direct Listing has no Lock-in period restrictions, making Direct Listing efficient and accessible. Furthermore, Direct Listing provides companies with access to liquidity in the capital market without raising capital.

Feature Direct Listing IPO
Underwriting of Public Offering Not required Required
Issue of shares to public Existing shares are offered New shares are issued
Appointment of Consultant to the issue/Financial Advisor Not Mandatory Mandatory
Appointment of other intermediates Not required Required
Pricing of shares Reference price is disclosed by the company in consultation with the Financial Advisor Agreement among the issuer and Underwriters in case of fixed-price method

Types of Direct Listing

Direct Listing – Existing Shareholders

Selling of shares by existing shareholders among themselves.

Direct Listing-Accredited Investors

Selling of shares by existing shareholders of the Company to Accredited Investors

Direct Listing- Specific Category of Investors

Selling of shares by existing shareholders to a specific category of investors. The category is specified by the company at the time of Direct Listing.

Listing Procedure

Upon meeting the eligibility criteria, the Issuer may apply to the Exchange for Direct Listing by filling out an application on Form-I with supporting documents (mentioned in Chapter 5D of PSX Rule Book) along with payment of non-refundable initial and annual listing fees.
The Exchange shall complete its approval process for Direct Listing within 15 working days, starting from the date of submission of all required information and documents to the Exchange’s satisfaction.

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We want to hear from you - Submit Interest

Whether you are just gathering information for a possible Direct Listing in the future or you are actually planning or preparing for Direct Listing, the Business Development team of PSX is here to offer assistance.

If you have already begun preparations for Direct Listing but want to hear from the PSX directly, our team is here for you to consult with. We are ready to answer any questions regarding the Direct Listing of your company. If you want to know about our system and rules for Direct Listing such as Direct Listing criteria or if you are curious to know what you should do to prepare for Direct Listing, please feel free to contact us through our website or by phone.

We also have staff available to visit prospective applicants and provide hands-on explanations of the Direct Listing process.