Octopus Digital IPO obtains a maximum price of Rs40.6 per share

Octopus Digital Initial Public Offer (IPO) received the highest number of offers in Pakistan Stock Exchange history during the technology stock book building process. The exercise price of the share has been set at its ceiling – Rs 40.6 per share.

The tech company was initially looking to raise a minimum of Rs 793 million by offering 27.4 million shares at a minimum price of Rs 29 per share on the IPO. But it will now raise 1.1 billion rupees on the IPO after securing the highest maximum price for its stock.

The book building was oversubscribed 27.3 times, so the successful bidders received only 2.75% of the shares they originally offered. This means that if a person has made an offer for 25,000 shares, they will only receive 668 shares.

“The IPO was very well received,” said senior research analyst Adnan Sami Sheikh. “He was (over) subscribed twice in the first 30 minutes,” he said.

He added that it was the highest response a company has ever received in PSX history.

Sheikh, who is the research AVP at Pak Kuwait Investments, said Octopus would reap huge synergies given its long history in the industry.

Octopus Digital is a 100% subsidiary of Avanceon Ltd. The company plans to develop 29 independent intellectual properties in different categories from which the company will offer two main offerings: Topware and Omni Connect.

“Avanceon has been providing industrial automation solutions for over 30 years. So they have 30 years of experience in the market and 30 years of customer rights, ”said Sheikh.

The bookbuilding took place on September 9th and 10th. The price was decided with institutions and high net worth individuals bidding via the Dutch auction method. The general public will be able to buy the shares of the company on September 16 and 17 at a price of Rs40.6.

What is the Dutch auction method?

In the Dutch auction method, the lower the highest price in the auction process and the price at which the total number of shares is fully sold becomes the strike price.

For example, if there are bids for 10 million shares at Rs40, for 10 million more shares, there are bids at Rs35 and bids for the remaining 7.4 million shares at Rs30, then the strike price will be Rs30. All the top bidders will also receive the shares at Rs30. The action will also be offered to the general public at this price as well.

Successful bidders will be provisionally allocated only 75% of the issue size, or 27.4 million shares in this case, and the remaining shares will be offered to retail investors at the strike price later.

What does the company want to do with the money?

The company needs funding to develop digital dashboard platforms to upgrade its suite of services to Industry 4.0, which is an industrial revolution that includes the automation of traditional manufacturing and industrial practices. . Industry 4.0 refers to a new phase of the industrial revolution that has a strong focus on interconnectivity, automation, machine learning and real-time data. The target markets for these services will be Pakistan, the Middle East and the United States.

How to buy Octopus Digital shares?

General investors can apply to buy shares on September 16 and 17 through United Bank Limited, Meezan Bank Limited, Faysal Bank Limited, Soneri Bank Limited, Allied Bank Limited, MCB Bank Limited and Habib Metropolitan Bank.

They can also buy stocks by submitting electronic and physical requests. Online applications can be submitted through the e-IPO system of PSX and the centralized E-IPO system of the Central Depository Company of Pakistan Limited. PES and CES are accessible through the web link https://eipo.psx.com.pk, www.cdceipo.com.

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