1. Arif Habib Limited Preparing for Initial Public Offering
Best Equity House, Pakistan
2016
Best Corporate Finance House of the Year (2015 & 2014)

2. How to Prepare for an Initial Public Offering
Analyzing Performance and Preparing Forecasts
The company’s finance managers should quantify and analyze historical performance and create a proper budgeting and future financial forecasts
The forecasts should provide a comprehensive overview of future business plans, new projects, and their expected costs and returns
The forecasts will be used to appropriately value the issuing entity as well as provide a basis for evaluating post-IPO performance
Review and Implement Best Corporate Governance Practices
The company should review corporate governance requirements applicable on a publicly listed company and prepare in advance
The company should appoint required number of directors
The company should form an audit committee and human resource and remuneration committee, which will track the company’s reporting standards and managerial compensation structure
Appoint Experienced Advisors
The company should appoint a highly experienced financial advisor and arranger, a book runner, an accounting firm, and a legal counsel
The accounting firm will conduct a comprehensive audit that will provide the company’s financials to prospective investors
The legal counsel will review and advice on compliance with all regulatory policies
The financial advisor and arranger will advice on offering timeline, indicative valuation, and will handle and coordinate the execution process

3. How to Prepare for an Initial Public Offering
Due Diligence by Financial Advisor and Arranger
The financial advisor will perform necessary due diligence to understand and evaluate the company’s business, organization structure, historical performance, key performance drivers, future requirements, and financial forecasts
The financial advisor shall work with the company to prepare realistic future assumptions and develop a financial model and information memorandum
The financial advisor shall evaluate market conditions and valuation to advise an appropriate offering price
The offering price should be attractive to the issuer, should cover their funding requirements, and should provide decent returns to future investors
Handling Transactional Operations
The financial advisor and arranger shall appoint and coordinate amongst the bankers to the issue, banker to the book building, share registrar, financial printer, and other agencies as required by the transaction process
Regulatory Approvals
The financial advisor shall assist the company in preparing the proper regulatory documentation required by the Pakistan Stock Exchange and Securities and Exchange Commission of Pakistan
The financial advisor shall seek the necessary regulatory approvals by providing all required disclosures in the Prospectus and financial forecasts

4. How to Prepare for an Initial Public Offering
Marketing and Placement
The financial advisor shall analyze potential institutional investors, corporations, high-net worth individuals, and other investors to create a marketing and placement strategy
The financial advisor and the company shall prepare an attractive offering story and create investor presentation
The financial advisor shall arrange and organize road shows to market the offering;
The road shows can be held various locations (domestic and international) as per the placement strategy
They shall aim to solicit interest from investors and provide proper background to research analysts
Book Building and General Subscription
Upon receipt of regulatory approvals, the Book Runner shall organize the Book Building process in which up to 75% of the issue size can be allocated to institutional investors, corporations, and high-net worth individuals via a Dutch Auction Method
The financial advisor and arranger shall appoint underwriters to handle the general subscription process for at least 25% of the issue size
Post-IPO Formalities
Post completion of the offering, the financial advisor and arranger shall process all applications and shall coordinate between the bankers to the issue, registrar, and printer to ensure timely disbursement of funds to the company and shares to the investors

5. Equity Offerings During CY 2016
There were three public equity offerings to date during CY 2016 which include the following:
IPO of Hi-Tech Lubricants Limited – January 2016
IPO of TPL Properties Limited – June 2016
IPO of Loads Limited – September 2016
Collectively, the equity offerings raised PKR 4.2 billion
Arif Habib Limited acted as Lead Advisor, Arranger and Book Runner in all of the above transactions

6. Lead Manger & Book Runner
IPO of Loads Limited
LOADS LIMITED
Initial Public Offer
PKR 1,700 million
(4.1x oversubscribed)
Lead Manger & Book Runner
September 2016
Offering Highlights
Loads Limited raised PKR 1,700 million as part of expansion and modernization of its manufacturing facilities
Offered of 50 million ordinary shares, representing 40% of post-IPO paid-up capital
The offer generated PKR 4,200 billion of overall demand at the Floor Price of PKR 15 per share, resulting in price discovery of PKR 34 per share at a premium of 127% to the Floor Price and oversubscription of 4.1x
Attracted a total of 497 Institutional and High Net worth investors, out of which 283 investors were allotted shares
Transaction Highlights
Offer structure
Initial Public Offering of Ordinary Shares
71.25% through Book Building
28.75% through General Public Subscription
Floor Price
PKR per share at P/E multiple of 6.4x
Strike Price
PKR per share at P/E multiple of 14.5x
Premium
127% (Strike Price over Floor Price)
Total Demand Generated
PKR 4,200 million, oversubscribed by 4.1x
Total Proceeds
PKR 1,700 million
Market Cap at IPO
PKR 4,250 million
Current Market Cap
PKR 7,070 million*
*As on November 16, 2016

7. HI-TECH LUBRICANTS LIMITED Lead Manger & Book Runner
IPO of Hi-Tech Lubricants Limited
HI-TECH LUBRICANTS LIMITED
Initial Public Offer
PKR 1,813 million
(2.9x oversubscribed)
Lead Manger & Book Runner
January 2016
Offering Highlights
Hi-Tech Lubricants Limited raised PKR 1,813 million for forward and backward integration. The proceeds were utilised for launching various retail outlets across Pakistan and installation of additional filling lines at the blending plant of its subsidiary
HTL has generated extra sales of 1.5bn in revenue due to an expansion
The net profit due to this expansion has increased to 518 million, up by 196 million in absolute terms
The offer PKR 3,070 million demand at the Floor of PKR 37 per share, resulting in price discovery of PKR per share at a 69% premium to the Floor Price and oversubscription of 2.9x
Transaction Highlights
Offer structure
Initial Public Offering of Ordinary Shares
75% through Book Building
25% through General Public Subscription
Floor Price
PKR per share
Strike Price
PKR per share
Premium
69% (Strike Price over Floor Price)
Total Demand Generated
PKR 3,070 million, oversubscribed by 2.9x
Total Proceeds
PKR 1,813 million
Market Cap at IPO
PKR 7,250 million
Current Market Cap
PKR 12,289 million*
*As on November 16, 2016