(EnergyAsia, Feb 28) — Pakistan’s largest initial public offering (IPO) of a stock has received strong public response and is expected to be over-subscribed by at least four times. The IPO for up to 20% of the government’s stake in Kot Addu Power Company or 88 million shares closed last Thursday amid enthusiastic response from small investors and local institutions.


According to the Dail News, the government has already invited 317,000 applications for 176 million shares of the independent power producer (IPP) at a price of Rs 30 per share.


The Privatisation Commission has already offloaded shares of Pakistan Oilfield Limited (POL), Oil and Gas Development Company Limited (OGDCL), and Pakistan Petroleum Limited (PPL) over the last two years.


“KAPCO is yet another one of those stocks, which is being offered at a significant discount to its fair worth,” said a local stock analyst. Foreign investors were also welcome to submit applications through local brokerage houses.


“This IPO will receive the highest number of applications in Pakistan,” said Tanvir Abid, research head at Live Securities, a local brokerage house. He said the IPO is attractively priced on the back of “a compelling valuation, an extremely attractive dividend yield and a lucrative shareholder cashflow stream.”


He said the KAPCO is the country’s largest IPP and a multi-fuel power plant running on a combination of fuels including furnace oil, gas and high-speed diesel.