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.
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:
Arif Habib Equity (Pv t) Ltd. Metal Once Corporation Mr. Hasib Rehman
About Aisha Steel...
4,713,797 47% 2,846,417 28% 2,439,786 24%
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
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.