Service Global Footwear Limited (SGFL), a leading exporter of footwear, raised Rs2.17 billion through the sale of 40.88 million shares, as investors paid the maximum allowed price of Rs53.2 per share at the Pakistan Stock Exchange (PSX) on Thursday.

The company discovered the share price during a two-day (April 7-8) auction through the book-building process and initial public offering (IPO).

It started the auction at a minimum price (floor price) of Rs38 per share. Laws in place allowed increase of a maximum 40% in the floor price to Rs53.2 per share during the IPO.

IPO proceeds will be invested by the company in Service Long March Tyres Ltd (SLM), which is the first all steel radial truck and bus (TBR) tyre manufacturing unit in Pakistan, being set up through a joint venture between Servis Group and Chaoyang Long March of China.

The book building was over-subscribed by five to eight times with the price closing at Rs53.2 per share. It saw a total demand of Rs8.95 billion against the issue size of Rs1.55 billion.

“The book building received a huge demand due to availability of significant liquidity in the market,” Arif Habib Limited CEO Shahid Ali Habib said while talking to The Express Tribune. Arif Habib Limited was the lead manager and book runner of the IPO.

He said a significant reduction of 625 basis points in the benchmark interest rate from March-June 2020 to 7% helped attract a huge liquidity into the market.

“Measures taken by the government and the central bank to revive the economy amid Covid-19 have built investor confidence in the stock market.”