Valuations of the issuance
• During year 2017. the company has made an initial public offering of
Rs 2,803,125000 through issuance of 32,500,000 ordinary shares of
Rs.10 each at a price of Rs 86.25 per share including share premium
of Rs. 76.25 per share amounting to Rs 2,478,125,000.
• Arif Habib Limited is the book-runner of the first IPO, Roshan
Packages, of 2017 The offer of shares to the general public was made
on January 30-31. The company had set the base price at Rs35 per
share. On February 24,2017,Pakistan stock exchange limited approved
the company application of listing.
Justification of the valuation
1. Strategic location: Roshan packages limited is located in Lahore
and has office in Karachi. Having located in major cities of Pakistan
allows it to have efficient means for running business.
2. Roshan Packages Limited is among the fastest growing companies
in the packaging industry in Pakistan. The company is custodian of
a legacy of growth based on innovation, quality and customer
services. With rapid business expansion we are now poised to
become the market leader in the packaging industry in the
country.
Justification of the valuation (Cont…)
4. Largest market coverage: As a result of high quality standards as well as innovation and hygiene,
maintained by the Company, Roshaan packages has been granted export permissions from it also has
clients in the corporate sector of Pakistan such as nestle, Unilever and Pepsi etc..
5. Ranked 23rd in Pakistan under 25 Fastest Growing Companies of Pakistan (2010)
• Ranked 37th in 100 Fastest Growing Companies of Pakistan – 2011
• Ranked 25th in Pakistan under 500 Fastest Growing Companies of Arabia Region – 2011
• Packaging Certified as Halal by Sanha Pakistan – PS:3733-2016 (Halaal) – Completed in 2018 (Flexible)
• Environmental Management System ISO 14001:2015 (Completed in 2019)
• SEDEX SMETA 6.1 Version (Compliance) (annual basis)
• Occupational Health & Safety Management System ISO 45001:2018 – 2020
• FSSC 22000
6. Naturally hedged margins: Since TOMC’s business model is focused towards exports, the margins
in the business are naturally hedged against Pak Rupee depreciation as products are priced in USD.
Justification of the valuation (Cont…)
8. Strong Management: With the vast experience in the packaging processing industry,
TOMC’s senior management is playing a key role in modernizing the industry which has
other-wise remained a traditional industry.
9. That base of large food and consumer goods companies is what has allowed
RPL to grow its revenues by an average of 31% per year since 2009, and its profits
by an average of 48% during that same period. However, that growth has come at
the cost of increased risk: the proportion of revenue coming from its top seven
clients has jumped from 40% in 2011 to 58% in the financial year ending June 30,
2016.
Comparison to the competitors
That base of large food and consumer goods companies is what has allowed RPL to
grow its revenues by an average of 31% per year since 2009, and its profits by an
average of 48% during that same period against their competitors. However, that
growth has come at the cost of increased risk: the proportion of revenue coming
from its top seven clients has jumped from 40% in 2011 to 58% in the financial year
ending June 30, 2016.
on the other hand other companies have not been able to have a consistent growth
rate like that of Roshan packages. AND THEIR REVEUES HAD FALLEN
Comparison to the competitors (Cont…)
ratio
roshan packages industry
Operating margin TTM
6.93%
13.9%
P/E Ratio TTM
19.56
33.89
11.38%
22.4%
Net Profit margin TTM
4.44%
17.72%
Revenue/Share TTM
41.02
188.06
Cash Flow/Share TTM
2.95
41.21
Return on Equity TTM
4.9%
8.41%
Return on Assets TTM
2.82%
6.8%
Dividend Yield ANN
2.57%
2.8%
Gross margin TTM
Comparison to the competitors (Cont…)
• Cutting-Edge Facility: TOMC has a state-of-the-art facility which includes hightech plant & machinery for processing beef, mutton and offal. It is the only
Company in the industry having equipment and expertise to process beef &
mutton offal and cater to international offal demand from Pakistan.
• Production capacity comparison:
On an aggregate basis, these units have a capacity of roughly 650,000 tons per annum. Raw
material for packaging is mostly wood pulp, non-wood pulp as well as recycled paper but
procurement is difficult due to lack of sufficient forests in Pakistan.
Buleshah company
The current plant has the capacity to produce 240,000 tons of paper and board and 210
million corrugated boxes annually.