ASL -- Aisha Steel Mills Ltd

[ouulman]

Aiesha Steel Mills IPO
JULY 02, 2012 BR RESEARCh
Under present condition, when Initial Public Offerings (IPOs) are far and few, listing of Aisha Steel Mills Limited (ASML) at the start of the current fiscal year will help in lifting investors confidence in the domestic equity market. Incorporated in 2005, ASML is a joint venture between Arif Habib Corporation Limited, Metal One Corporation Japan and Universal Metal Corporation. The green field project is aimed at producing Cold Rolled Coil (CRC) with an initial annual capacity of 220,000 tons. The project is currently in its trial phase and slated to start manufacturing of saleable products in the 1QFY13. Industries such as automobiles and allied, engineering, home appliance and packaging are the major buyers of CRC. With a paid-up share capital of Rs.3.4 billion, the steel company managed to garner Rs.234 million from pre-IPO investors. While the public portion of ASML IPO comprises of 10 million ordinary shares at a price of Rs.10 per share, out of which 0.5 million shares have been allocated to the employees of the Company and the remaining 9.5 million shares have been set aside for the general public. The real drawing card for ASML is a huge supply deficit in the domestic industry, with local production standing at around 175,000 ton in 2011-nearly one third of the total domestic demand, according to ASMLs prospectus. In addition to sponsors strong financial backing, another trump card is Japanese partners affiliation with steel distribution and trading industry. When forecasting outlook for industrial goods manufacturers, it goes without saying that to a large extent the bottom-line performance of the manufacturers hinges on the outlook of production cost, raw material prices and currency movements. Moreover, higher interest rate could throw spanner in the works, with a debt to equity mix of around 63:37. With fewer shares (smaller IPO size) on sale, the market expects oversubscription of the issue. Subsequent to pre-IPO placement the Companys book value stood at Rs.8.79 per share. The market speculates that the sponsors are eyeing benefits beyond raising capital, given that the listing will result in goodwill creation and valuation benefits

sawal ye he k where will be the found energy for this project jb k mulk me energy hy he nahe?

project is located in bin qasim industrial estate which is provided bijli by kesc. Asml needs just 16mw (i think) which wikll be provided by kesc - supply not an issue as kesc doesnt cut electricity of paying industrial areas and doesnt suffer from the kind of shortage other discos suffer from

[tariqhafeez]

no need to go for such IPO as steel companies already listed are struggling .  While the Debt equity of 65:35 is not good to buy equity as first 3 years, cash flow will be locked in to pay for debt repayments.

[KSE Investor]

no need to go for such IPO as steel companies already listed are struggling .  While the Debt equity of 65:35 is not good to buy equity as first 3 years, cash flow will be locked in to pay for debt repayments.

I agree with your valued comments. No need to poke the nose into highly leveraged companies where scope of business is not limited.

[KSE Investor]

no need to go for such IPO as steel companies already listed are struggling .  While the Debt equity of 65:35 is not good to buy equity as first 3 years, cash flow will be locked in to pay for debt repayments.

I agree with your valued comments. No need to poke the nose into highly leveraged companies where scope of the business and grwoth in share value is  limited.

[Hamid Mamraiz]

Kisse ne IPO mein apna hissa dala hai???

[Akif]

Kisse ne IPO mein apna hissa dala hai???

nahey bhai Arif Habib uncle key har ipo over sub hotey hay or phir wo share kuch arsa badh 30% discount mai mil jata hay.
Next capital ipo price 10/share , low few days ago near 7/share  .
Ahbl (smbl) ipo price 22/share and after 3-5 months of ipo share price 15  .
ipo say pehlay Arif habib uncle key company ka profit rocket key tarah oupar jata hay, ipo kay badh fuel esa khatam hota hay kay "crash landing" karta hay share  .
just shared my opinion. 

[Akif]

no need to go for such IPO as steel companies already listed are struggling .  While the Debt equity of 65:35 is not good to buy equity as first 3 years, cash flow will be locked in to pay for debt repayments.

brilliant 

[Tarzan]

Power consumed by steel-melters, re-rolling units: sales tax reduced to Rs seven per unit
The Federal Board of Revenue (FBR) has reduced sales tax from Rs 8 to Rs 7 per unit of electricity consumed by the steel-melters and steel re-rolling units and correspondently reduced the repayment-cum-drawback on the export of ingots or billets and mild steel re-rolled products. In this connection, the FBR has amended Sales Tax Special Procedure Rules; 2007 here on Tuesday to reduce sales tax on electricity consumed by steel-melters and steel re-rolling mills from July 1, 2012.

In budget (2012-213), the FBR has increased the rate of sales tax from Rs 6 to Rs 8 per unit of electricity consumed by the steel-melters and steel re-rolling units. Through another amendment in the Sales Tax Rules, now the sales tax has been reduced from Rs 8 to Rs 7 per unit of electricity consumed by the steel-melters and steel re-rollers.

Every steel-melter, steel re-roller and composite unit of steel melting and re-rolling (having a single electricity meter), would pay sales tax at the rate of Rs 7 per unit of electricity consumed for the production of steel billets, ingots and mild steel (MS) products which will be considered as their final discharge of sales tax liability.

According to the amended rules, the payment of tax by steel melters, re-rollers and composite units of melting and re-rolling shall be made through electricity bills along with electricity charges. Provided that in case the due amount of sales tax is not mentioned in the electricity bill issued to any steel melter or re-roller or composite unit of melting and re-rolling, the said melter or re-roller or composite unit shall deposit the due amount of tax for the relevant tax period at the rate of Rs 7 per unit of electricity consumed excluding the amount of sales tax already paid on the electricity bill related to the said tax period through his monthly sales tax return.

Through another SRO802(I)/2012, the FBR has reduced repayment-cum-drawback on the export of ingots or billets and mild steel re-rolled products. The FBR has notified that the repayment-cum-drawback of Rs 6447 per metric ton would be available on the export of ingots or billets other than imported or Pakistan Steel Mills or Peoples Steel Mills; Rs 7,357 per metric ton on export of Mild steel re-rolled products manufactured from ingots and billets other than imported or Pakistan Steel Mills or of Peoples Steel Mills and repayment-cum-drawback of Rs 8,526 per metric ton would be available on the export of mild steel re-rolled products manufactured from imported billets or billets of Pakistan Steel Mills or Peoples Steel Mills.

[Hamid Mamraiz]

Ayesha Steels Over Subscribed by 2.7 times 

http://www.kse.com.pk/notices-updates/detail2.php?id=4&nid=034602&pagesize=1&pageno=1

[ouulman]

Ayesha Steels Over Subscribed by 2.7 times 

http://www.kse.com.pk/notices-updates/detail2.php?id=4&nid=034602&pagesize=1&pageno=1

naice  !

[Farzooq]

Aisha steel to start trading from 6th aug

Under the Code. ASL

Start price. 10 Rs.

First day Trading upper lock is 50 percent that is Rs 5

Then other than first day 10 percent of the closing rate.

[fidaab]

Aisha steel to start trading from 6th aug

Under the Code. ASL

Start price. 10 Rs.

First day Trading upper lock is 50 percent that is Rs 5

Then other than first day 10 percent of the closing rate.

farzooq bahi aisha steel trading start 6 aug any postive impact ahcl share price

[naumaan]

http://www.pakistantoday.com.pk/2012/08/02/news/profit/kse-approves-formal-listing-of-aisha-steel/

Farzooq bhai, your advice is required please 

[Farzooq]

http://www.pakistantoday.com.pk/2012/08/02/news/profit/kse-approves-formal-listing-of-aisha-steel/

Farzooq bhai, your advice is required please 

Most of the brokerage houses are recommending buy at 10. Lets see how it trades after listing.

[engrusama]

Today is the first trading day of Aisha Steel to be on board as it has a successful voyage by surpassing all previous records during last three years and first in the current fiscal year which was made on July 3-4, 2012. Aisha Steel was oversubscribed by 2.7x with a paid-up share capital of PRs3.4bn. The Aisha Steel offered PR100m for IPO but it has generated approximately PRs270m through general public participation followed by a successful move to generate PRs234m as pre-IPO investment, indicating restoration of confidence among the investors particularly retail investors.
Joint Venture...
Aisha Steel is a joint venture between Arif Habib Group, Metal One Corporation, a subsidiary of Mitsubishi, and Universal Metal One, one of the world’s largest steel trading company. The following shareholders are divesting 100m shares at par value of PRs10:
NameofOfferers
Arif Habib Equity (Pv t) Ltd. Metal Once Corporation Mr. Hasib Rehman
About Aisha Steel...
SharesOffered %oftotalOfferSize
4,713,797 47% 2,846,417 28% 2,439,786 24%
10,000,000 1.00




According to the information mentioned in Aisha Steel prospectus, Aisha Steel is located at Port Qasim, one of the largest private sector investments in the value added flat-rolled steel industry in the country. The major part and machinery are imported from Japan and Austria has already been installed. This project is aimed at producing Cold Rolled Coil (CRC) with an initial annual capacity of 220k tons. There is a huge demand and supply gap in the domestic market, with local production standing at around 175k ton in 2011-nearly one third of the total domestic demand. The project is currently in its trial phase and expected to commence its commercial production in the 1QFY13. We remind our reader that CRC has a huge demand in heavy industries such as automobiles and allied, engineering, home appliance and packaging.
Figures in Ton '000'
Demand Supply Gap
Conclusion...
Actual Projected (Growth - 3.5%)
2008 2009 2010 2011 2012 2013 2014 2015
450 428 467 583 620 652 686 704 55 94 65 175 430 501 545 545 395 334 402 408 190 151 141 159 Source: Aisha Steel Prospectus

As per the Aisha Steel prospectus, the main objective of the plant is to tap the huge potential to meet the local demand as the local companies are producing 175k tons of CRC against demand of 583k tons which is fulfill by imports. Based on initial response by the local investors, we expect more IPO in the same category expected or Aisha Steel may opt to divest more of its shareholding in future. We will come up with a complete coverage on Aisha Steel shortly.

Pearl