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BF Biosciences Limited (BFBL), a prominent player in the pharmaceutical sector, is preparing for a significant move by applying for a listing on the main board of the Pakistan Stock Exchange (PSX). The company aims to raise a minimum of Rs1.37 billion through its Initial Public Offering (IPO), offering 25 million shares to institutional, high net worth, and individual investors. The IPO is set to be conducted via a Dutch auction process, with shares being offered at a minimum price of Rs55 each, which could rise up to Rs77 per share, depending on investor demand.
The funds raised from this IPO will be directed towards several key areas crucial for the company’s growth and operational efficiency. These include purchasing new plant and machinery, expanding the product range, and introducing new medicines. The company also plans to use part of the proceeds to improve its working capital and boost its export capabilities. In particular, BFBL aims to acquire export certifications such as PIC/S and SRA, which are essential for entering international markets. The company’s strategy includes developing new products, including the Glucagon-like Peptide (GLP1), and aggressively exploring export markets.
The draft prospectus, now available on the PSX website, highlights that BFBL reported a substantial increase in revenue for the first three quarters of the current fiscal year, reaching Rs2.91 billion compared to Rs1.80 billion for the entire previous year. Additionally, the company’s profit after tax stood at Rs314 million for the nine months, showing a significant improvement from Rs149 million the previous year.
Despite the positive financial performance, the prospectus outlines several risks that could impact the business. These include macroeconomic factors such as exchange rate fluctuations, high interest rates, inflation, and rising energy prices, which affect raw material costs and operational expenses. The company also faces potential delays in product registration with the Drug Regulatory Authority of Pakistan (DRAP) and the threat of counterfeit pharmaceutical products.
The IPO will be conducted through the book building method, where bidders can place offers for the entire issue size. Successful bidders will be allocated 75% of the shares, while the remaining 25% will be available to retail investors. Arif Habib Limited is serving as the lead manager for the IPO.
