Secure Logistics Group Ltd. Eyes Public Offering to Raise PkR600 Million

Karachi, Secure Logistics Group Ltd. (SLG), a notable player in Pakistan's largely unregulated logistics and transport sector, is set to initiate its book building process on March 27th and 28th, 2024. The company aims to raise PkR600 million through a public offering, representing 18.27% of its post-IPO paid-up capital. This move comes as part of SLG’s strategic efforts to enhance its market position and capitalize on the sector’s growth potential, despite the challenges posed by a competitive landscape and volatile economic conditions.

According to AKD Securities Limited, SLG has set a base price of PkR12.0 per share for the upcoming offering. The funds raised from this public offering, amounting to PkR600 million, will be alongside a pre-IPO equity conversion valued at PkR584.9 million. This financial strategy aims to strengthen the company's footing in a sector where the largest market-share leaders hold only about 2%, operating predominantly on a cash basis.

Despite the logistical sector's high credit days and competitive pressures, SLG has managed to maintain a manageable liquidity situation. The company's ability to achieve superior margins and growing revenues highlights its operational efficiency and market potential. However, AKD Securities Limited expresses caution regarding SLG's future, citing concerns over its business plan's viability in a highly competitive and unpredictable market. The emphasis on deleveraging, rather than expanding its fleet or infrastructure, raises questions about the company's long-term growth strategy.

As SLG prepares for its public offering, investors and market watchers will closely monitor its performance and strategic decisions in navigating the challenges and opportunities within Pakistan's logistics and transport sector.