ISLAMABAD: Dalda Foods Ltd, Pakistan’s largest cooking oil manufacturer, is planning an initial public offering (IPO) in the country to bankroll the expansion of its production capacity.
The company is looking to raise about 3.3 billion rupees (US$14mil or RM60mil) in a share sale that could take place before Ramadan, which will start on March 22, according to Aziz Jindani, its chief executive officer.
Dalda’s IPO would be Pakistan’s largest by a consumer staple company, data compiled by Bloomberg showed.
“This particular IPO is intended to fund Port Qasim expansion,” Jindani, 44, said in an interview last week, referring to the company’s factory at one of the country’s busiest shipping ports.
“The proceeds could expand its capacity in Karachi to extract oil from seeds, he added. It may reach 900 tonnes a day, more than doubling the current rate, he said.
The offering could involve selling about 50 million shares, consisting of two thirds news shares with the rest coming from existing shareholders, according to Shahid Ali Habib, chief executive officer at Arif Habib Ltd, the sole adviser to the IPO.Dalda traces its roots to 1937 when Unilever Plc introduced it to the region.
In 2004, Unilever sold the Dalda’s Pakistan business to Westbury Group, owned by Bashir Jan Mohammad and a group of employees.
Besides manufacturing cooking oil, Dalda has expanded into making liquid tea whitener, according to its website.
Consumers in the South Asian country continue to spend on cooking oil despite higher inflation and a slowdown in economic growth as it’s seen as a necessity in households.
“It’s recession proof as a category,” Jindani said.
The company’s revenues have grown 27% a year on average since 2018, he said.
Dalda’s products account for about 5% of the cooking oil market that’s estimated to be worth about US$8bil (RM34.3bil), Jindani said.
The listing could help Dalda capture a larger share of Pakistan’s fragmented edible oil market. — Bloomberg
