A tech company, which develops software (mostly) for overseas markets, is set to sell a 16.67% stake in the company to individuals and institutional investors to raise a minimum of Rs 1.05 billion on the Pakistan Stock Exchange (PSX) next week. .
The growth company, Coeus Solutions Limited, is expected to start bidding at a minimum (floor) price of Rs 210 per share to auction up to 5 million shares on Monday. The auction process (book building process) would remain in place for three days to end on Wednesday.
Later, the auctioned shares would be available for trading only among accredited board investors of the Growth Enterprise Market (GEM), which is a risky trading platform compared to Motherboard shares. from PSX. “Technology was PSX’s best performing sector in 2021,” the company said. “However, it is only 6.38% of the KSE-100 index, highlighting the potential for future listings.” Previously, the company postponed listing on the stock exchange in March due to the prevailing global and domestic political and economic instability then.
The main objective of the Rs 1.05 billion fundraising is to “develop the existing products of Coeus Pakistan, namely WorkHub and vidmonials, and launch a merger and acquisition strategy to acquire businesses already in business (Software as a Service/SaaS) in Pakistan,” the company said. in its information notice available on the PSX website. Unlike a typical software outsourcing company, the company operates in Germany through Coeus Solutions GmbH, which has a few customers for whom it acts as a full product team.
“These customers are the main companies in Europe”, currently more than 30,000 users in more than 40 countries use their products, the memorandum states. Pakistan’s IT exports reached $1.8 billion in the prior fiscal year (26% five-year CARG) and have already reached $1.1 billion in the first six months of the fiscal year in course 2021-22, he said. “Coeus Solutions GmbH operates in Germany, which is a market of over $100 billion in 2021 but still underserved, with only 2% of Pakistan’s IT exports attributable to Germany,” he added. He said he plans to execute his own consolidations (merger and acquisition) in Pakistan.
There is a shortage of IT resources, especially due to the high demand from existing IT companies and startups, so it is difficult to build teams and create products from scratch. “Therefore, the company intends to acquire an already operating SaaS business in Pakistan and sell its products to customers in Germany,” he said. Coeus Pakistan and its associated company in Germany jointly made an after-tax profit of Rs 130.4 million in the first half (July-December) of the current financial year. They made a net profit of Rs 173.3 million in the previous year ended June 30, 2021 and earned Rs 113.5 million in the previous financial year, according to the memorandum.
This will be the fourth addition to the GEM board since the development of the specialty market about a year ago. In addition, three to four other companies applied for listing. They are at various stages of joining the PSX GEM Board. “The total number of companies on the GEM Board of Directors will reach approximately six or more by the end of the current calendar year 2022,” said PSX Managing Director and CEO Farrukh H Khan. , in an interview with The Express Tribune in April.
In addition to this, the Pakistan Software Export Board (PSEB) recently appointed AKD Securities as the senior manager to get the top eight tech startups listed on the GEM board, he said. Previously, PSEB signed a memorandum of understanding (MoU) with PSX to make at least 40 tech startups available to the GEM board. About eight tech startups have yet to apply for listing, he said afterwards.