Pakistan is preparing for its largest initial public offering (IPO) to date (from a non-state firm). Air Link Communications is a mobile phone distributor and retailer with plans to raise somewhere in the region of 5.85bn Rupees, which is around $75m.
Air Link Communications was founded ten years ago and has since become one of the largest firms in it’s sector. Sales rose by 50% to 3.6m units in the year ending to July 2021. Pakistan has seen an influx of floatations this year.
Air Link plan to use funds from the IPO to help expand it’s network and intends to have 150 outlets by 2026, up from 14 today.
Should you invest in Air Link Communications?
As always, you should do as much research into Air Link as possible before you commit to an investment. If they’re planning on using IPO money for expansion, check out the management team and determine their capabilities. Do they have a track record of managing this type of growth? Or is it completely new to them?
Understanding net debt will also be important. How much debt do they currently have and how much are they likely to take on during the expansion?
How much profit are Air Link currently making and what does that look like in relation to Air Links market cap? Are they look expensive or has the share price floated cheaply?