SECP approves prospectus of Octopus Digital IPO

KARACHI: Avanceos Limited has notified the bourse that the Securities and Exchange Commission of Pakistan (SECP) has accorded approval to Octopus Digital Limited to issue, circulate and publish the prospectus for the issuance of 27.350 million ordinary shares.

The issue consists of 27.35 million ordinary shares, i.e., 20 per cent of the total post-IPO paid-up capital of Octopus Digital Limited.

The initial public offering (IPO) will be conducted through a 100 per cent book-building method at a floor price of Rs29/share with the maximum price band of up to 40 per cent above the floor price.

The book-building will be held on September 9 and 10, 2021, while the public subscription will be held on September 16 and 17, 2021.

General public portion of the issue comprises 6.837 million ordinary shares (25 per cent of the total issue) at the strike price.

Octopus is a technology service-oriented company that provides After-Market Services (AMS) to a wide range of clients, both locally and internationally.

Other IT sector listed companies, including Systems Limited (SYS), Netsol Technologies Limited (Netsol), TRG Pakistan Limited (TRG) and Avanceon Limited (parent of Octopus) are not direct competitors of Octopus, the prospectus notes.

The services and technology sectors require constant automation and upgradation, and the company and its sponsor are a longstanding automation provider for manufacturing industries.

Octopus is expecting a robust demand from various manufacturing and industrial sectors across Pakistan, the Middle East and the US.

The issue comprises 27.35 million ordinary shares, which constitutes 20 per cent of the total post-IPO paid-up capital of Octopus Digital.

The strike price will be the price at which 100 per cent of the issue is subscribed. However, the successful bidders will be provisionally allotted 75 per cent of the issue size, comprising 20.512 million shares and the remaining 6.837 million shares will be offered to retail investors.

Octopus requires funding of Rs793.15 million to develop various digital dashboard platforms to expand its services suite to industry 4.0, which is an industrial revolution that includes automation of traditional manufacturing and industrial practices. The target markets for these services will be Pakistan, the Middle East and the United States.

Octopus’s business model is based on recurring earnings based on perpetual or term-based multi-year monthly subscription service instead of fixed cost or time and material-based projects; thereby, reducing risk of volatile earnings, as this is prevalent in other conventional businesses in Pakistan.