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Case

The First Meat Sector IPO: Asian Journal of Management Cases


14(2) 1–23
Al Shaheer Corporation © 2017 Lahore University of
Management Sciences
SAGE Publications
sagepub.in/home.nav
DOI: 10.1177/0972820117712305
http://ajc.sagepub.com
Fazal Jawad Seyyed1
Arslan Shahid Butt2
Hafsa Ashfaq2

Abstract
This case examines the June 2015 decision of Muhammad Asad, a fund manager at Al Meezan Investment
Management Limited, to participate in the Initial Public Offering (IPO) of Al Shaheer Corporation, a
leading meat sector company of Pakistan. He was interested in increasing the exposure of the Meezan
Islamic Fund (MIF) to the food sector, provided attractive risk-adjusted returns could be achieved.
Based on the research team analysis and his own assessment, Asad had to decide whether or not to
participate in the IPO book building process and the number of shares to bid for at each price level.
Both Market Multiples and Discounted Cash Flow (DCF) valuation methods had yielded share value
higher than the IPO floor price of PKR 43 per share which encouraged Asad to consider the investment
opportunity. He also had to decide on the amount that he could allocate to the IPO on behalf of MIF.
Asad had to prepare his recommendations on the IPO for presentation and approval by the investment
committee in the upcoming meeting. He has asked you to conduct an independent analysis and valu-
ation of Al Shaheer stock over the weekend and share your findings with him early Monday morning.

Keywords
Initial Public Offering (IPO) Process; Book building; IPO Valuation; Discounted Cash Flows (DCF); Shariah
Investment Criteria

Discussion Questions
1. What are the costs and benefits of Al Shaheer Corporation going public? Briefly describe the IPO
process.
2. What is the growth potential of the meat sector of Pakistan within the global halal food market?
How is Al Shaheer Corporation positioned to benefit from this opportunity?

1
Visiting Faculty, Suleman Dawood School of Business, Lahore University of Management Sciences, Lahore, Pakistan.
2
Suleman Dawood School of Business, Lahore University of Management Sciences, Lahore, Pakistan.

Corresponding author:
Fazal Jawad Seyyed, Visiting Faculty, Suleman Dawood School of Business, Lahore University of Management Sciences, Lahore,
Pakistan.
E-mail: fazal.jawad@lums.edu.pk
2 Asian Journal of Management Cases 14(2)

3. What are some of the key risks faced by Al Shaheer Corporation that could impact its financial
position and performance in the future?
4. Does Al Shaheer meet the Shariah criteria of Al Meezan Investment Management Limited to
qualify for investment?
5. What is your estimate of the target stock price of Al Shaheer using the Discounted Cash Flow
approach and information provided in the case? What about Al Shaheer’s stock value based on
market multiples?
6. Would you recommend Asad to participate in the IPO? Defend your position.

Muhammad Asad, a fund manager at Al Meezan Investment Management Limited, skimmed through
an equity valuation report as he reflected on the issues that had come up in a long discussion with the
equity research team which concluded on Friday evening, 5 June 2015. The discussion had focused on
the upcoming initial public offering (IPO) of Al Shaheer Corporation, a leading meat sector company
of Pakistan. The research team was led by Ali Asghar, senior manager research, and an equity analyst,
Hassan Khan, who specialized in food sector research. Both Asad and Ali had recently attended the
pre-IPO road show and had interesting discussions with Al Shaheer senior managers and the research
analysts of the lead underwriters, the AKD Securities Limited (AKDS) and the Next Capital Limited
(NCL). The book-building portion of the IPO was scheduled to open for subscription on 10–11 June
2015. Asad, who managed the leading Shariah compliant equity fund, Meezan Islamic Fund (MIF), was
interested in increasing the fund’s exposure to the food sector, provided attractive risk-adjusted returns
could be achieved.
Based on the research team’s analysis and his own assessment, Asad had to decide whether or not to
participate in the IPO, and in the event of participation in the book-building process the number of shares
to bid for at each price level. The research team had used the market multiples and discounted cash flow
(DCF) methods for IPO valuation. Both methods had yielded share value higher than the IPO floor price
of PKR 43 per share, albeit significantly different, which encouraged Asad to consider the investment
opportunity. However, since the upper price limit of the offer was not specified, his dilemma was not to
bid too low and be priced out or bid too high, giving up the upside potential if the offer price settled at the
higher end. He wondered if he should make a single limit bid or step bids at different price levels in the
book-building exercise. In addition, Asad had to decide on the amount that he could allocate to the IPO on
behalf of the MIF. Asad just had the weekend to prepare his recommendations on the IPO for presentation
and approval by the investment committee in the meeting scheduled for Monday, 8 June 2015.

Al Meezan Investment Management Limited


Al Meezan Investment Management was the largest asset management and investment advisory firm in
the private sector of Pakistan. Established in 1995, Al Meezan had been facilitating investors to achieve
their financial goals through investing in Shariah compliant products. Its vision was ‘to make Shariah
compliant investing a first choice of investors.’ It had a diverse investor clientele base ranging from
institutions and businesses to individuals and high net worth (HNW) clients.
Al Meezan offered a wide range of Shariah compliant mutual funds and investment solutions.
The mutual funds included equity, balanced asset allocation, money market, fixed income, market
tracker, capital preservation, fund-of-fund, commodity, and voluntary pension schemes. With assets
under management (AUM) of over PKR 67.7 billion1 (as of 31 May 2015), it had eleven open-end
mutual funds, one voluntary pension scheme and several administrative plans. MIF was the largest fund
Seyyed et al. 3

of Al Meezan with AUM of PKR 26.41 billion as on 31 May 2015. The fund had a stellar track record of
performance. The separately managed accounts (SMAs) offered clients with customized solutions to
portfolio structuring and investment management (Al Meezan Investment Management Limited, n.d.).

The IPO Process


The process of IPO was the first sale of stock by a private company to the general public in the primary
markets, enabling it to have the stock listed and traded on the stock exchanges. It was an arduous and
complex process.
Before initiating the IPO process, a private firm typically had to do a significant amount of prepara-
tory work: generate a credible business plan to utilize capital; prepare audited financial statements;
restructure organization and hire professional managers; induct independent directors on its board; pro-
vide performance projections and cash flows; and engage with investment bankers, accountants and
legal advisors. A bake-off meeting could be helpful with several investment banks prior to selecting a
lead underwriter who could spearhead the IPO process and put together a syndicate. The selection crite-
ria included the IPO track record and reputation of the underwriter, proposed compensation, research
analysts’ coverage and support, distribution capabilities and ability to provide aftermarket stabilization
support. The lead underwriter had a number of responsibilities including financial and procedural advice,
valuing the IPO shares, buying and marketing the shares to the public, generating ongoing research on
the company and price stabilization in the aftermarket. The terms of the IPO agreement were outlined in
the letter of intent which was not legally binding until the offering price was finalized immediately
before the distribution of shares. The letter of intent indicated the nature of contract—firm commitment
or best effort. Under the firm commitment, the underwriter would purchase the shares for an agreed net
price and then attempt to sell the shares at a higher price resulting in the underwriter spread as a compen-
sation for its efforts. Any unsold shares were held by the underwriter for its own account. In a best efforts
contract, the underwriter would agree to make the best effort to sell the shares at an agreed price without
any commitment to purchase any unsold shares.
An important responsibility of the underwriter was to assist the firm in producing the registration
statement for approval by the regulatory body. The registration statement included information such as
description of business, use of funds and business strategy, ownership structure, management, financial
data and performance history. The statement was prepared after the underwriter had conducted a com-
prehensive exercise of due diligence in reviewing and verifying the company documents, contracts, tax
returns, etc. Once the registration statement was filed with the regulator, it would become the prelimi-
nary prospectus often referred to as the red herring, used in the marketing of shares to potential investors
in person or through road shows organized by the lead underwriter and the firm’s management.
Another issue facing the offering companies was the timing of the offer. The investor appetite of IPOs
globally fluctuated considerably from hot issue markets enabling investors to earn attractive returns as a
result of under-pricing and/or excessive demand leading to oversubscriptions, generally in the backdrop
of sharply rising stock markets. The issues had tended to vary dramatically over time in Pakistan reflect-
ing the market sentiments and uncertainty surrounding the capital markets. Most of the IPOs in Pakistan
were done in the 1990s, averaging around 35 IPOs per year. However, from 2000 to June 2015, the IPO
market had dropped to an average of about six IPOs per year. In 2013, only three IPOs materialized in
Pakistan despite the Pakistan stock market’s stellar performance of posting a gain of 49 per cent for the
year. The number of IPOs and secondary offerings rose to nine in 2014 as markets continued to rise on
the back of foreign investors holding US$4.4 billion worth of Pakistani shares, that is, 36 per cent of the
4 Asian Journal of Management Cases 14(2)

free-float and 8 per cent of market capitalization (Abduhu, 2014). Exhibit 1 provides summary informa-
tion about the IPOs in Pakistan during the past four years. The lack of appetite for IPOs in Pakistan was
due to a number of factors including the socio-political and economic uncertainty surrounding capital
markets. In addition, a more stringent capital market’s regulatory regime and oversight could have
deterred some companies from going public.

Al Shaheer Corporation
Al Shaheer Corporation Limited (ASC) was the prime name in the formal meat sector of Pakistan.
It was established as a partnership in 2008 and converted into a private limited company in June 2012.
This Karachi-based company was HACCP (Hazard Analysis Critical Control Point) certified and had a
vision ‘to become a leader in the global halal2 meat trade’ (Al Shaheer Corporation Limited Preliminary
Prospectus, 2015). The company enjoyed a leading position as a fresh meat exporter and retailer in
Pakistan.
With more than 550 employees and US$45 million (PKR 4.4 billion) in annual revenue, Al Shaheer
operated in three business segments: meat exports, meat retail, and institutional meat sales. Its products
ranged from fresh and chilled beef, mutton and lamb for export and local markets, camel meat both fresh
and frozen for exports and fresh chilled and frozen raw fish with a range of marinated and ready to cook
meat items. Animals were procured mostly from cattle markets and brought to the company abattoirs3 for
slaughter and processing. Exhibit 2 shows the supply chain of Al Shaheer.
Al Shaheer’s sales grew by a compound annualized growth rate (CAGR) of 35 per cent in value and
17 per cent in volume during the last four years as of 2014. The total sales of the company had shown an
increasing trend over the past five years with the major share in revenue coming from exports. Exhibit 3
shows the sales revenue generated by key segments of the company.

Export Segment
The primary business segment of Al Shaheer, representing 77 per cent of the top line in 2014, was the
export division. The company sourced local cattle and slaughtered them at the state-of-the-art abattoir
and transported the meat carcass in custom-designed refrigerated trucks from the factory to the airport to
be delivered to its international clients. It exported certified fresh meat to United Arab Emirates (UAE),
Bahrain, Oman, Kuwait and Saudi Arabia. Some of its products ended up at some of the largest stores
in the Middle East including LULU and Carrefour in Dubai. The company had also added a de-boning
facility along with the blast freezers to the abattoir, enabling it to export boneless, frozen meat via sea to
major regional markets resulting in significant savings in transportation cost. Al Shaheer capitalized on
the growing international demand and its exports grew from over PKR 2.3 billion in 2011–2012 to over
PKR 3.7 billion in 2013–2014.

Retail Segment
Pakistan had a meat market worth PKR 1.25 trillion (Baloch, 2015) and about 95 per cent of the meat
in the country was sold through the wet market or roadside butchers. Al Shaheer brought a paradigm
shift in Pakistan’s meat sector. The company saw potential for modern and upscale butcher shops in the
Seyyed et al. 5

country and sought to provide a hassle-free and pleasant meat buying experience to the customers by
introducing a chain of specialty meat shops, Meat One, in 2010. Meat One provided quality meat with
live butchery as well as convenient pre-packs and marinated and ready to cook products in Karachi,
Lahore, and Islamabad.
Another retail brand of Al Shaheer, Khaas,4 introduced in 2013, targeted price-sensitive consumers in
the mass market. The custom-designed Khaas outlets offered competitive prices which were at par with
the prevailing market rates for beef, mutton and chicken, along with a clean and pleasant meat buying
experience. Khaas meat stores were present both as stand-alone meat shops and within larger retail
outlets in Karachi and Lahore.
To reduce the cyclical impact of fall in post-Eid al-Adha5 sales, Al Shaheer launched a qurbani6
service in 2011 in Karachi, Lahore, and Islamabad. This enabled customers to delegate their sacrifice
ritual to Al Shaheer which generated positive cash flows for the company.

Institutional Selling
Al Shaheer’s institutional selling division catered to local clients, with bulk orders, at cost-effective rates.
The clients included multinational corporations, hospitals, caterers and restaurants looking for a one
stop solution for their meat procurement requirements. Abbot pharmaceuticals, Agha Khan University
Hospital, Pakistan Navy, Pizza Hut, and Johnny Rockets were a few notable clients.

Al Shaheer Farms
In March 2015, the company decided to vertically integrate its supply chain by incorporating Al Shaheer
Farms (Private) Limited. It planned to set up Pakistan’s largest feedlot fattening farm in the Thatta
district of Sindh by adopting best practices in farm management and technology to raise cattle with the
sole purpose of obtaining meat. The company planned to eventually raise 8,000 cattle heads every year
for high quality production of beef. The cattle would be brought to the farm, kept for ninety days and
fed a proper diet in order to increase the meat yield and quality. Premium prices would be charged for
the high-quality meat.

The Global Halal Food Market: an Overview


The global halal food and beverage market was estimated at US$1,128 billion in 2014 and accounted for
16.7 per cent of the global food and beverage market. The market was expected to grow at a CAGR of
5.8 per cent (2014–2020) and would be worth US$1,585 billion by 2020. The top three countries in the
Halal Food Indicator (HFI) ranking were Malaysia, Pakistan, and the UAE. Furthermore, based on 2014
estimates, the top countries with Muslim food consumption were Indonesia (US$157.6 billion), Turkey
(US$109.7 billion), Pakistan (US$100.5 billion) and Egypt (US$75.5 billion) (Thomson Reuters, 2015).
The key factor contributing to the growth of the global halal food market was the increase in global
Muslim population. According to the Pew Research Centre, in 2010, there were 1.6 billion Muslims in
the world, 23 per cent of the world’s total population. Also, with Islam being the second fastest growing
religion in the world, the Muslim population was expected to grow twice as fast as the non-Muslim
population, reaching 2.2 billion in 2030 (BMI Research, 2015).
6 Asian Journal of Management Cases 14(2)

Over the years, the global meat consumption also increased. In China, the average meat consumption
per year increased from 9 kg per person to more than 50 kg per person in thirty years leading to strong
growth in demand for meat products. The average meat consumption in the developing world was at
16 kg per person and that in industrialized countries was around 90 kg per person (Bradfield & Ismail,
2012). The meat consumption in Pakistan was around 18 kg per person as compared to the world average
of 42 kg per capita (Al Shaheer Corporation Limited Preliminary Prospectus, 2015).
The global expenditure on meat amounted to US$1.3 trillion in 2013. However, the global halal meat
market valued at US$300 billion in 2014 with 12 per cent demand coming from Muslims residing in
Europe and the Americas (Business Recorder, 2015a). Pakistan’s strength had been 100 per cent halal
production. However, despite being the sixth largest country in terms of population and the second larg-
est Muslim country in the world, its global share in the halal meat exports was less than 3 per cent accord-
ing to Halal Research Council (HRC) (Business Recorder, 2015a), and it was ranked eighteenth in the
global halal meat market. Over 80 per cent of the halal trade was done by non-Muslim majority countries
(Memon, 2013a). Refer to Table 1.

Table 1. Global Halal Meat Exporters

Meat Exporters Share


Brazil 54%
India 11%
Australia  9%
EU  7%
New Zealand  4%
USA  3%
Argentina  1%
Others 11%
Source: Meat Value Chain Assessment of
the Livestock Sector in Pakistan.

Meat sector of Pakistan


More than 8 million families in the rural areas of Pakistan were involved in raising livestock, and this
sector contributed 11.8 per cent to the national GDP of the country (Ministry of Finance, Government of
Pakistan, n.d.). Livestock had grown at an average rate of 4 per cent per annum since 2007. The major
part of the livestock population was located in the rural and semi-urban areas of Punjab and mainly
consisted of cows, buffalos, sheep and goats. Sindh was the second largest province, in terms of livestock
population, followed by Khyber Pakhtunkhwa (Aslam, 2013).
Milk was the major product of livestock, followed by meat. The total meat production in Pakistan
increased from 3.2 million tonnes in 2011–2012 to 3.5 million tonnes in 2013–2014 (Figure 1). Meat was
supplied on a daily basis to meet the nutritional requirements of the local consumers and a large number
of animals were slaughtered on Eid al-Adha. Moreover, meat and meat products were exported to vari-
ous international markets. The bulk of meat exports of Pakistan comprised red meat, especially beef. The
major export markets for Pakistani beef and mutton were the UAE, Saudi Arabia, Iran, Kuwait, Qatar
and Oman. The meat exports of Pakistan grew by 9.5 per cent in 2013–2014 and at a CAGR of 29.1 per
cent from US$14 million in 2002–2003 to US$230 million in 2013–2014 (Figure 2).
Seyyed et al. 7

Figure 1. Meat Production in Pakistan


Source: Ministry of National Food Security and Research.

Figure 2. Pakistan’s Exports of Meat and Meat Products


Source: Trade Development Authority of Pakistan.

There were three types of livestock producers in Pakistan: (i) small farmers comprised over 80 per cent
of the farming community with less than five animals; (ii) medium-sized farmer/producers with five to ten
animals represented 14 per cent of the farming community; and (iii) large-scale producers having more
than ten animals were only 3 per cent. Since most of the animals in the county were raised by subsistence
farmers, their nutritional requirements were not properly met, resulting in low-quality meat. Moreover,
breeds ideal for meat production had not been developed in Pakistan, specifically for the purpose of
obtaining beef. Also, the beef animals, buffalo and cattle, were typically slaughtered very young when
they had not attained the appropriate weight for good quality meat or when they were too old.
Animal breeding for meat was done on some organized feedlot farms with a trained workforce. There
were two types of feedlot players in Pakistan: small-scale and capital-intensive larger farms. The small-
scale feedlot farmers focused on earning premiums by raising a small herd of animals (around twenty)
for sale on Eid al-Adha and the larger feedlots focused on volumetric sales and value addition and had
contracts with the exporters. Better protein-rich feed, proper husbandry and veterinary care at these
farms resulted in high yielding meat animals and high-quality meat. However, feedlot fattening farms
were a relatively new phenomenon in Pakistan but the concept was gaining traction.7
8 Asian Journal of Management Cases 14(2)

There were rural-based slaughterhouses, government abattoirs and private export-oriented slaughter-
houses in the urban areas. In 2012, there were eleven slaughterhouses in Pakistan that met international
standards—five in Karachi and Lahore each, and one in Peshawar. In total, there were 350 slaughter-
houses in the public sector and around forty in the private sector (Bradfield & Ismail, 2012). Meat prices,
in the domestic market, were regulated by the government, resulting in low margins for butchers and
meat shops. On the other hand, the processed meat industry did not face regulatory price controls. Their
operations ranged from slaughtering of meat animals to processing meat into ready to cook, fermented,
packaged and preserved forms. The major players included Al Shaheer Corporation, Zenith Associates,
Syed Traders, PK Foods, Abedin International, KATCO International and Tazij Meat and Foods.
Meat was channelled via wholesalers and retailers to various hotels and restaurants, food service
providers, suppliers and super markets. Meat was mostly bought fresh in the wet market by consumers
at the butcher shops where it was cut according to individual customer preferences. Over the years, how-
ever, a number of specialty retail meat shops offering consumers a clean and hygienic environment were
opened to cater to the demand of a growing urban middle class. These included Meat One, Khaas,
Zenith, Meat Dukan, Meat Pro and TATA Best Foods.
In order to ensure ample supply of meat to the domestic and international markets, the government
encouraged the private sector to invest in the livestock business to promote commercial livestock farm-
ing. An export-led growth strategy was envisaged with a focus on high-quality livestock and value-
added products to enhance existing exports and to help the meat industry make inroads into new markets
(Aslam, 2013). For example, the Punjab government established the Punjab Agriculture and Meat
Company (PAMCO) under Section 42 of the Company’s Ordinance, 1984, with a state-of-the-art slaugh-
terhouse to develop the meat sector.

The Poultry Subsector


The poultry subsector contributed 28 per cent to the total meat production in Pakistan and generated
income for 1.5 million people. With an investment of over PKR 200 billion, this subsector showed a
robust growth of 8–10 per cent annually and contributed 1.3 per cent to the GDP of Pakistan, 6.1 per cent
to agriculture and 10.8 per cent to livestock value added in the country. The poultry value added showed
an increase of 7.4 per cent from PKR 121.7 billion in 2012–2013 to PKR 130.7 billion in 2013–2014
(Ministry of Finance, Government of Pakistan, n.d.).
Commercial poultry farming in Pakistan started in the 1960s with the establishment of PIA Shavers
by Canada’s Messers Shavers with the help of the Pakistan International Airlines (PIA) in 1962. By
2013, there were 25,000 commercial poultry farms and 150 feed mills with a production capacity of 2,821
million tonnes of compounds feed per annum in the country (Memon, 2013b). The government encour-
aged the development of the poultry subsector through favourable tax treatment to poultry and related
businesses.

Al Shaheer Going Public


Al Shaheer Corporation would be Pakistan’s first IPO from the meat sector, offering 25,000,000 ordinary
shares (27.31 per cent of the post-IPO paid-up capital) of face value PKR 10 each to the public. It would
also be the first IPO in the food sector during the last four years, after Engro Foods IPO in 2011. The
fund manager of MIF, Muhammad Asad, recalled the success of Engro Foods Limited’s IPO and began
Seyyed et al. 9

looking into the IPO of Al Shaheer Corporation. Engro Foods was priced at PKR 25 per share which was
more than twenty-five times the projected 2011 earnings of the company, a steep premium over the then
prevailing market P/E multiple of less than eight. The stock had performed extremely well and traded
at more than PKR 68 per share, a year after the listing (Tirmizi, 2012). Asad had a discussion with the
senior manager research, Ali Asghar, about the next IPO from the food sector and decided to attend the
pre-IPO company presentation. While driving back from the presentation, Asad pointed out that this IPO
could turn out to be another success story:

The company has started investing in human resources, filling key management positions with employees from
various multinational companies in the country. So, instead of learning through trial and error, it can catapult its
growth story by learning from the experience of these individuals.

Asad asked Ali to look into the IPO and conduct an in-depth analysis of the company. He eagerly awaited
the analysis report from the research team before he could decide on participating in the IPO.
Amidst positive developments in the capital market in Pakistan, Al Shaheer Corporation decided to
go public by offering 75 per cent shares of the total issue via the book-building mechanism and the
remaining 25 per cent shares to the general public. The company had experienced high growth but the
lack of funds had constrained its expansion and development plans. During the company’s presentation,
a senior executive at Al Shaheer remarked:

The extraordinary growth of the company compelled us to consider going public to raise funds so that higher
level of investments sustain our growth and bring greater efficiencies to the business yielding superior returns
for our stakeholders.

He further elaborated:

In the last few years, there were significant growth opportunities in the food sector in Pakistan. But due to lack
of sufficient funds, Al Shaheer was unable to fully benefit from those business opportunities. We believe that we
can achieve the forecasted profits with the funds raised and provide attractive returns to the public, investing in
the company.

Al Shaheer planned to use the proceeds of the IPO to set up a poultry unit and meat processing factory,
extend the retail network of the company, and meet the working capital requirements of the company.
Exhibit 4 gives the proposed utilization of the IPO proceeds for each project category.
The company aimed to enhance its foothold in the poultry business by establishing a fully vertically
integrated enterprise from hatchery to final production in Lahore. Exhibit 5 shows the project milestones.
The plant was expected to start commercial production in June 2017 with a capacity of 5,000 birds per
hour. Also, a meat-processing facility was to be established to produce frozen, ready to cook products
which had a year-long shelf life. The processed meat would be distributed nationwide through retail shop
chains and super markets.
The company had retail outlets, Meat One and Khaas, in Karachi, Lahore, and Islamabad, catering to
socio-economic classes (SEC) A and B. Since 9 per cent of the population of Pakistan fell under SEC A
segment and 12 per cent under SEC B classification, the total local market size for Meat One and Khaas
was estimated to be 649.69 million kg (Table 2). Al Shaheer planned to capitalize on this huge market by
opening retail shops at prominent locations throughout the country. Part of the IPO proceeds were to be
used to open thirty-five retail outlets and store-within-stores under the brand names of Meat One and
Khaas.
The remaining PKR 294.5 million of the IPO proceeds were to be used to fulfil the short-term
working capital requirements of the company. The lack of working capital had severely restricted the
10 Asian Journal of Management Cases 14(2)

Table 2. Local Market Size for Meat One and Khaas

SEC Total Per Capita Market Size Market Size Market Size
Group Population Availability (Volume in kg) (Value in PKR) (Value in US$)
A 16.12 million 278.39 million 111.35 billion 1.1 billion
B 21.5 million 371.30 million 148.5 billion 1.4 billion
Total 37.62 million 17.27 kg 649.69 million 259.87 billion 2.5 billion
Source: Al Shaheer Corporation Preliminary Prospectus.

operations of the company. According to Ali, Al Shaheer needed liquidity to pay its creditors and make
room for more credit purchases.

Al Shaheer IPO Execution8


Exhibit 6 provides the phase-wise outline of Al Shaheer Corporation IPO process. The decision to go
public was initially made in 2013. However, the company decided to streamline its business segments
and align its corporate structure prior to initiating the formal IPO process in December 2014. The process
started with the appointment of consultants, auditors and bankers for the issue and development of
a financial model with five-year projections. AKDS and NCL were mandated by Al Shaheer as the
joint lead managers and joint book runners to the issue. Based on the advice of investment bankers,
Al Shaheer brought high-profile professionals on their board as independent directors to meet the
regulatory requirements and to benefit from their expertise. The financial results for 31 December 2014
were audited by the audit firm, Ernst & Young Ford Rhodes Sidat Hyder & Co.
After the preparatory work was done in meeting the regulatory requirements, Al Shaheer proceeded
to file the registration application with the Securities and Exchange Commission of Pakistan (SECP).
The company then began collecting other required information to prepare the offering prospectus, con-
ducting the company valuation, and establishing a floor price for the issue. After the preparation of the
Preliminary Prospectus or Red Herring, Al Shaheer obtained approval of the SECP for the issue, circula-
tion, and publication of the prospectus. The prospectus was cleared by all three exchanges, that is, the
Karachi Stock Exchange (KSE), the Lahore Stock Exchange (LSE) and the Islamabad Stock Exchange
(ISE)—and an application was submitted for listing. The prospectus signed by authorized signatories
was also filed with the registrar of the companies and the companies’ registration office (CRO), along
with the letter of the auditors, written confirmation of legal advisors and bankers, and written consents
of the directors, the chief executive officer, and the company secretary of Al Shaheer.
Al Shaheer had to follow a strict timeline in preparing the offering documents so that the issue was ready
for the book-building process in time. The preliminary prospectus was used to market the issue.
Presentations, meetings and road shows were conducted by the lead managers and book runners to promote
the issue. A total of 18,750,000 ordinary shares, at the floor price of PKR 43 per share, were to be offered
to institutional investors and high net worth individuals (HNWI) from 10 June 2015 to 11 June 2015.
The minimum bid size of PKR 1,000,000 was required for HNWIs to participate in the book-building
process. The investors could place a limit bid or a step bid. Limit bid was a bid at the limit price, that is,
the maximum price an investor was willing to pay for a specified number of shares whereas a step bid
was a series of limit bids at increasing prices. An order book of the bids collected from these investors
would be maintained by the book runners and the strike price would be determined through the Dutch
auction method. This book-building portion of the issue would be underwritten by book runners to the
issue within two working days of the closing of the bidding period.
Seyyed et al. 11

The next step would be the general public offering. The underwriting agreements for the public
portion would be finalized within ten working days from the closing of the bidding period and the
Final Prospectus would be published within seventeen working days of the closing of the bidding period.
A total of 6,250,000 ordinary shares of Al Shaheer Corporation would be offered to the general public
and the subscription period of these shares would be within seven and thirty days from the publication
of the final prospectus. The estimated issuance cost of the offering was over PKR 63 million (Exhibit 7).

Competition, Outlook and Risks


Hassan Khan, a food sector research analyst at Al Meezan Investment Management, evaluated the
prevailing situation of the formal meat industry in Pakistan. The competition in the export segment
was growing with fourteen players operating in the market, leaving Al Shaheer with a market share of
16 per cent (Hussain, 2015). Ali was also concerned that the export sales were primarily to the Middle
East which implied a significant concentration risk and there was need to diversify its export markets.
Kamran Khalili, the CEO of Al Shaheer, acknowledged the intensifying competition in the export segment
but remained optimistic about the future of his company. He remarked (Business Recorder, 2015b):

This market is so huge that one can comfortably retain a decent market share even if there are as many as
50 players competing against each other.

The government had announced a tax holiday for four years to new halal meat producers, setting up
their facilities and acquiring halal certification by December 2016 (Ali, 2015). Benefiting from the tax
holiday, Fauji Meat Limited, a meat subsidiary of Fauji Fertilizer Bin Qasim Limited (FFBL), could
become a strong competitor of Al Shaheer.
Ali had found that Al Shaheer was operating significantly below its full capacity. The daily slaughter-
ing capacity of Al Shaheer was 60 tons of beef and 80 tons of mutton, whereas the actual capacity utiliza-
tion, in 2014, stood at 24 tons of beef and 6 tons of mutton (Al Shaheer Corporation Limited Preliminary
Prospectus, 2015). Another concern of Ali was the poultry business in Pakistan. ‘Engro Foods pilot meat
project had failed leading to significant book losses,’ Ali cautioned. On the positive side, Pakistan was
the third largest consumer of goat meat and ninth largest beef eating nation in the world (Hussain, 2015).
Al Shaheer had immense potential to cater to the local demand along with tapping into the global halal
meat market. The company had recently received a go ahead for exports to Egypt and was exploring
business opportunities in Iraq and China to broaden its clientele base. On the local front, Al Shaheer
intended to expand its retail network. While analyzing the financial data of Al Shaheer, Ali realized that
Meat One offered higher margins than export sales. However, the outlets needed good traffic flow and
time to break even.

Valuing the ipo


Hassan extracted the financial data from the preliminary prospectus and gathered other relevant
information from various sources to assess the investment opportunity (Exhibit 8). As a first step, the
research team had to confirm that Al Shaheer met the Shariah criteria of Al Meezan (Exhibit 9). His
research team also gathered multiples data on selected food sector companies for relative valuation
(Exhibit 10). The real challenge was coming up with realistic base-case assumptions to project cash
flows and value the enterprise.
12 Asian Journal of Management Cases 14(2)

Based on their analysis, the research team came up with some key assumptions to be used in
determining the target stock price of Al Shaheer. They used a risk-free rate of 8.2 per cent9 and the market
risk premium of 6 per cent at the time. In the debt market, Al Shaheer faced borrowing cost of about
16 per cent with target debt to total value ratio of 36 per cent. A beta of 1 was used for Al Shaheer by the
research team in estimating the cost of equity capital. The team arrived at the forecasted sales and mar-
gins as indicated in Table 3 for the five years (2016–2020) as the base-case values. The revenue projec-
tions implied a significant growth over the next five years and then tapering down to the long-term
growth rate of about 4–5 per cent. The tax rate for the next four years (2016–2019) was assumed to be
zero because of the tax holiday announced by the government over the next four years. However, 2020
onwards, an effective tax rate in the range of 10–20 per cent could be assumed after adjusting for subsi-
dies and tax rebate on exports. The capital expenditure and working capital requirements were to be met
according to the proposed year-on-year projected needs of the company from the IPO proceeds.
Depreciation was assumed at 10 per cent of the net non-current assets at the end of each year. The com-
pany was not expected to pay out dividends during the next five years. Its focus would be to consolidate
the business through expansion and retain any surplus cash in the business.

Table 3. Forecasted Sales and Margins

(PKR million) 2016F 2017F 2018F 2019F 2020F


Net Sales 7,752 9,704 14,252 16,661 18,660
EBIT Margin 5% 5% 6% 7% 7%
Source: Case writers’ notes.

The analyst report on the IPO was fairly comprehensive, highlighting the key value drivers, risks
faced by the company, and indicative prices based on the two commonly used approaches to price IPO
shares, namely market multiples and DCF. Since the two methods indicated significantly different prices
for the IPO, Asad had asked you to conduct an independent analysis and valuation of Al Shaheer stock
over the weekend and share your findings with him early Monday morning. Asad had indicated to you
that MIF could allocate a significant amount to the IPO, depending upon the upside potential of the
opportunity. He had also given you an extract from the Al Shaheer bidding form (Exhibit 11) to pencil
in your suggestive bid type and quantity of shares at the bid price(s) based on the available information
and your analysis. You should be ready to present your findings and defend your position convincingly
when you meet Asad on Monday.
Exhibit 1. Details of IPOs in Pakistan

Price 1
Week
After
Formal Earnings Formal
Company Listing Per Share Listing
Name Industry Total Issue Book-building Portion General Public Portion Date (EPS) Price to Earnings (P/E) Multiple Date
No. of No. of
Ordinary Per Share Ordinary
(No. of Shares Floor Shares (%
Ordinary (% of Total Price/Price Bidding of Total Per Share Subscription
Shares) Issue) Band Date Issue) Price Date
Company KSE 100 Industry
(PKR)
2012
Next Financial 10 million 7.5 million PKR 10 21–22 Feb 2.5 million PKR 10 20–21 Mar 27 Ap –1.51  N/A N/A   N/A PKR 9.52
Capital Ltd. Services (75%) 2012 (25%) 2012 2012
TPL Technology 30 million 20 million PKR 10 2–3 May 10 million PKR 10 5–6 June 2012 16 July Pre-IPO: Pre-IPO: N/A N/A PKR 9.27
Trakker Hardware and (66.7%) 2012 (33.3%) 2012 0.11 90.91x
Ltd. Equipment
        Post-IPO: Post-IPO:
0.09 111.11x
Aisha Steel Industrial 10 million – – – 10 million PKR 10 3–4 July 2012 6 Aug  N/A  N/A N/A   N/A PKR 11.5
Mills Ltd. Metals and (100%) 2012
Mining
2013
SFL Ltd It was listed without public offering after the demerger of Sapphire Fibres Limited under a Scheme of 7 Jan 2013  – – –  –  – 
Arrangements sanctioned by the Honourable High Court of Sindh through its Order dated 28 April
2011.
Lalpir Electricity 37.984 28.488 PKR 15 18–19 9.496 PKR 22 3–4 July 2013 20 Aug N/A  N/A  N/A  N/A  PKR 22.03
Power Ltd. million million June 2013 million 2013
(75%) (25%)
Engro Chemicals 75 million 56.25 PKR 20 19–21 18.75 PKR 28.25 16–17 Dec 17 Jan  N/A N/A  N/A  N/A  PKR 37.83
Fertilizers million Nov 2013 million 2013 2014
Ltd. (75%) (25%)
Avanceon Technology 25.166 18.87 PKR 14 27–28 Nov 6.29 PKR 14 7–8 Jan 2014 11 Feb  N/A Pre-IPO: 10.19x  N/A PKR 19.25
Ltd. million million 2013 million 2014 2.51x
(75%) (25%)
(Exhibit 1 continued)
(Exhibit 1 continued)

Price 1
Week
After
Formal Earnings Formal
Company Listing Per Share Listing
Name Industry Total Issue Book-building Portion General Public Portion Date (EPS) Price to Earnings (P/E) Multiple Date
No. of No. of
Ordinary Per Share Ordinary
(No. of Shares Floor Shares (%
Ordinary (% of Total Price/Price Bidding of Total Per Share Subscription
Shares) Issue) Band Date Issue) Price Date
Company KSE 100 Industry
(PKR)
                  Post-IPO:    
3.35x
2014
Hascol Oil and Gas 25 million 18.75 PKR 20 4–5 Mar 6.25 PKR 56.5 8–9 Apr 2014 14 May 5.97 3.36x 9.49x 7.7x PKR 67.2
Petroleum million 2014 million 2014
Ltd. (75%) (25%)
United Bank Commercial 160 million 160 million PKR 155 12 June – – – Already  N/A N/A  N/A  N/A  N/A
Ltd. (SPO) Banks (100%) 2014 Listed
Pakistan Oil and Gas 70 million 63 million N/A 26–27 June 7 million N/A N/A Already N/A N/A N/A N/A N/A
Petroleum (90%) 2014 (10%) Listed
Ltd. (SPO)
Engro Power 40.475 – – – 40.475 PKR 30.02 22–24 Sept 27 Oct 3.36 8.93x  N/A N/A  PKR 38.54
Powergen Generation million million 2014 2014
Qadirpur (100%)
Ltd.
Saif Power Power 48.3085 36.2315 PKR 18 to 30 Sept 12.077 PKR 30 11–12 Nov 15 Dec 3.15 5.71x 10.71x 7x PKR 34.1
Ltd. Generation million million PKR 30 2014 million 2014 2014
(75%) (25%)
Allied Bank Commercial 131.27 131.27 N/A 10–11 Dec – – – Already  N/A N/A  N/A   N/A –
Ltd. (SPO) Banks million million 2014 Listed
(100%)

Price 1
Week
After
Formal Earnings Formal
Company Listing Per Share Listing
Name Industry Total Issue Book-building Portion General Public Portion Date (EPS) Price to Earnings (P/E) Multiple Date
No. of No. of
Ordinary Per Share Ordinary
(No. of Shares Floor Shares (%
Ordinary (% of Total Price/Price Bidding of Total Per Share Subscription
Shares) Issue) Band Date Issue) Price Date
Company KSE 100 Industry
(PKR)
Sindh Modaraba 13. 5 – – – 13.5 PKR 23–24 Dec 23 Jan  N/A N/A  N/A  N/A  PKR 8
Modaraba million million 10 per 2014 2015
certificates certificates certificates
(100%)
Systems Information 13 million 9.75 PKR 25 to 5 Dec 3.25 PKR 40 29–30 Dec 3 Feb 2015 Trailing Pre-IPO: 8.24x N/A PKR 51.01
Ltd. Technology million PKR 40 2014 million 2014 Pre-IPO: 5.46x
(75%) (25%) 4.58
Trailing Post-IPO:
Post-IPO: 6.27x
3.98
Synthetic Engineering 19.35 14.512 PKR 23 to 8 Dec 4.83 PKR 30 6–7 Jan 2015 10 Feb 2.1 10.94x  N/A 24x PKR 35.51
Products and Allied million million PKR 39.1 2014 million 2015
Enterprise (75%) (25%)
Ltd.
2015
Mughal Iron Steel and 27.35 20.512 PKR 20 to 16 Feb 6.838 PKR 34 16–17 Mar 15 Apr Trailing Pre-IPO: 9.7x N/A PKR 44
and Steel Allied million million PKR 34 2015 million 2015 2015 Pre-IPO: 4.2x
Industries (75%) (25%) 4.76
Ltd.
        Trailing Post-IPO:
Post-IPO: 5.6x
3.57
Habib Bank Commercial 250 million 250 million PKR 166 7–10 Apr – – – Already N/A  N/A  N/A   N/A N/A
Ltd. Banks (100%) 2015 Listed
Dolmen REIT 555.925 416.94375 PKR 10 8–9 June 138.98125 TBA TBA TBA – – – – –
City REIT million million 2015 million
units units (75%) units (25%)
Al Shaheer Food 25 million 18.75 PKR 43 10–11 June 6.25 TBA TBA TBA HY-2015 – – – –
Corporation Producers million 2015 million Pre-IPO:
Ltd. (75%) (25%) 1.7
Source: Case writers’ analysis based on data from Securities and Exchange Commission of Pakistan, company documents and online news.
16 Asian Journal of Management Cases 14(2)

Exhibit 2. Al Shaheer Corporation’s Supply Chain

Source: Al Shaheer Corporation Preliminary Prospectus.

Exhibit 3. Al Shaheer Corporation’s Sales History and Breakdown by Business Segment

Source: Al Meezan Investment Management Limited.


Seyyed et al. 17

Exhibit 4. Utilization of IPO Proceeds by Al Shaheer Corporation

Exhibit 4.1. Overall Utilization of the IPO Proceeds

Particulars Amount (PKR Millions)


Investment in Poultry and Meat Processing Plant 580
Extension of Retail Network 200.5
Working Capitala 294.5
Total 1,075

Exhibit 4.2. Cost Breakup of Poultry and Meat Processing Plant

Cost in PKR mn
Land 8 Acres at 5,000,000 per acre 40
Construction PKR 1,500 per sq. feet at 50,000 sq. feet 75
Stork Chicken Slaughter Line (5000 birds per hour)— 60
Purchased in 2015
Blast Freezer 50
Spiral Freezer 20
Air Chilling System 10
Cold Rooms 10
Plant Design 5
Plant Installation 15
Miscellaneousa 10
Total Cost for Poultry Business 295
Total Cost of Meat Processing Plant 85
Working Capitalb 200
Total Cost 580

Exhibit 4.3. Cost of Retail Network Expansion

Cost in PKR mn
Furniture and Fitting, Equipment and Misc. per Outlet A 5.72857
No. of Outlets to be Opened B 35
Total Cost for Network Expansiona A×B 200.5
Source: Adapted from Al Shaheer Corporation Preliminary Prospectus.
Notes: The breakup of IPO proceeds utilization is based on full subscription at the Floor Price of PKR 43 per share.
a
Costs to be spread evenly over five years (2016 to 2020).
b
Utilized after the start of commercial production, that is, in 2018.
18 Asian Journal of Management Cases 14(2)

Exhibit 5. Al Shaheer’s Poultry Business—Project Milestones

Project Milestones Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Apl-16 Jan-17 Mar-17 Apl-17 Jun-17
Land Purchase
Design and Drawing
Approval for Construction
Ground Breaking
Purchase of Equipment
Arrival of Equipment
Completion of Installation
Trial Production
Commercial Production
Source: Al Shaheer Corporation Preliminary Prospectus.

Exhibit 6. Al Shaheer Corporation’s Phase-wise IPO Process

Source: Case writers’ notes.


Seyyed et al. 19

Exhibit 7. Estimated IPO Expenses of Al Shaheer Corporation

Expenses to the Issue Rate Amount (PKR)


Underwriting Commission—Book Building a
0.25% 2,015,625
Underwriting Commission—General Public 1.50% 4,031,250
Take-up Commission—General Public 1.50% 4,031,250
Commission to Bankers to the Issue—General Public 0.50% 1,343,750
Commission to Bankers to the Issue—Book Building 2,500,000
Bankers to the Issue—Out of Pocket 285,000
TREC Holders of the Stock Exchanges 1.00% 10,750,000
Book Runners Fee 0.75% 6,046,875
Lead Management and Arrangement Fee 2.00% 21,500,000
Printing, Publication of Prospectus/Application Forms 3,000,000
KSE Listing Fee and Charges:
  •  Initial Listing Fee 831,410
  •  Annual Listing Fee 441,190
  •  Service Charges 50,000
LSE Listing Fee and Charges:
  •  Initial Listing 831,410
  •  Annual Listing 226,914
  •  Service Charges 50,000
ISE Listing Fee and Charges:
  •  Initial Listing 831,410
  •  Annual Listing 65,000
  •  Service Charges 10,000
KSE Software Charges for Book Building 500,000
CDC Annual Fees for Eligible Security 150,000
CDC Fresh Issue Fee 0.16% 1,720,000
SECP Application and Processing Fees 200,000
Legal and Professional Charges 1,000,000
Balloters and Share Registrar Fees etc. 175,000
Miscellaneous Costs 1,000,000
Total 63,586,084
Source: Al Shaheer Corporation Preliminary Prospectus.
Note: aThese amounts represent the maximum possible costs under these heads based on floor price.
20 Asian Journal of Management Cases 14(2)

Exhibit 8. Al Shaheer Corporation Limited—Condensed Financial Statements and Ratios

Exhibit 8.1. Financial Statements (Year Ended 30 June)

(Amount in PKR mn) 2012 2013 2014 HY 2015


Income Statement
Sales-Net 2,344 3,118 4,438 2,267
Cost of Goods Sold 2,078 2,761 3,896 1,906
Gross Profit 265 357 541 360
Administrative Expenses N/A 194 335 220
Other Operating Expenses N/A 40 53 9
Other Operating Income N/A 23 12 10
Operating Profit 136 146 165 141
Finance Cost 54 38 78 43
Profit Before Tax 64 107 87 97
Profit After Tax 47 76 73 115
Earnings per Sharea 0.71 1.1 1.1 1.7
Balance Sheet
Non-current Assets 352 526 1,055 1,109
 Property, Plant and Equipment N/A N/A 1,041 1,076
  Intangible Assets N/A N/A 3 2
  Long-term Deposits N/A N/A 11 13
  Deferred Tax Asset N/A N/A – 18
Current Assets 238 440 808 839
Total Assets 591 967 1,863 1,948
Issued, Subscribed and Paid-up Capital 315 260 260 287
Unappropriated Profit – 79 156 284
Share Premium – – – 163
Surplus on Revaluation of Fixed Assets – 24 242 229
Advance Against Future Issue of – 129 211 –
Capital
Long-term Liabilities – 10 132 94
  Deferred Liabilities N/A N/A 27 16
 Long-term Financing (Diminishing N/A N/A 105 78
Musharaka)
Current Liabilities 276 465 862 890
  Accrued Profit N/A N/A 16 13
 Short-term Borrowings—Secured N/A N/A 36 50
  Due to Related Party N/A N/A 93 13
 Creditors N/A N/A 100 166
 Murabaha N/A N/A 487 518
  Other Payables and Liabilities N/A N/A 130 130
Note: aBased on pre-IPO shares of 66.50 mn.
Seyyed et al. 21

Exhibit 8.2. Financial Ratios

(Year Ended 30 June) 2012 2013 2014 HY 2015


GP Margin 11.3% 11.4% 12.2% 15.9%
PBT Margin 2.7% 3.4% 2.0% 4.3%
PAT Margin 2.0% 2.4% 1.6% 5.1%
Current Ratio 0.86 0.95 0.94 0.94
ROAb N/A 13% 8% 12%
ROEb N/A 24% 15% 26%
Source: Adapted from Al Shaheer Corporation Preliminary Prospectus.
Note: b1HFY15 numbers have been annualized.

Exhibit 9. Shariah Screening Criteria of Al Meezan Investment Limited

Shariah compliance of stocks is done under the guidance of qualified and reputed Shariah experts.
For stocks to be ‘Shariah compliant’, it must meet ALL the six key tests given below.
Business of the Investee Company
Core business of the company must be halal and in line with the dictates of Shariah. Hence, investment
in securities of any company dealing in conventional banking, conventional insurance, alcoholic drinks,
tobacco, pork production, arms manufacturing, pornography or related activities is not permissible.
Debt to Total Assets
Debt-to-asset ratio should be less than 37 per cent. Debt, in this case, is classified as any interest-bearing
debts. Zero coupon bonds and preference shares are, both, by definition, part of debt.
Non-compliant Investments to Total Assets
The ratio of non-compliant investments to total assets should be less than 33 per cent. Investment in any
non-compliant security shall be included for the calculation of this ratio.
Non-compliant Income to Total Revenue—Purification of Non-compliant Income
The ratio of non-compliant income to total revenue should be less than 5 per cent. Total revenue includes
gross revenue plus any other income earned by the company. This amount is cleansed out as charity as a
pro rata ratio of dividends issued by the company.
Illiquid Assets to Total Assets
The ratio of illiquid assets to total assets should be at least 25 per cent. Illiquid asset, here, is defined as
any asset that Shariah permits to be traded at value other than the par.
Net Liquid Assets to Share Price
The market price per share should be greater than the net liquid assets per share calculated as: (Total
Assets – Illiquid Assets – Total Liabilities) divided by number of shares.

Source: Al Meezan Investment Management Limited.


22 Asian Journal of Management Cases 14(2)

Exhibit 10. Peer Group Data

National Rafhan
(FY2014) Engro Foods Foods Nestle Unilever Maize Mitchells Shezan
Year End Dec-14 Jun-14 Dec-14 Dec-14 Dec-14 Sept-14 Jun-14
Book Value per 15.1 24.28 278.45 127.22 1050 73.51 188.49
Share (PKR)
Annual EPS 1.13 8.23 174.85 190.29 272.48 13.65 32.5
(PKR)
Closing Price 133.12 339.46 9990 7277.5 9000 401.08 900
(1 June 2015)
(PKR)
P/E 117.81 41.25 57.13 38.24 33.03 29.38 27.69
P/B 8.82 13.98 35.88 57.20 8.57 5.46 4.77
EBITDA Multiple 26.27 34.03 26.88 32.47 23.67 27.04 11.63
Source: Bloomberg.

Exhibit 11. Extracted from Al Shaheer Bidding Form

Bid Details
  No. of Shares Bid For Bid Price per Share Total Amount
Bid Option (Please tick) (In Figures) (In Figures) (In Figures)
Limit Order      
Step Order:      
Option (1)      
Option (2)      
Option (3)      
Option (4)      
Total (Shares and      
Price)

Important Instructions:

1) Bids should be placed for a minimum amount of PKR 1,000,000/-. It should also be noted that no. of shares bid for
should be rounded and fractional shares will not be accepted. Please ensure that after rounding the number of shares
multiplied by your bid price, is at least PKR 1,000,000/-.
2) Any bid received below the floor price will not be accepted by the Joint Book Runners.
Source: Next Capital Limited.
Seyyed et al. 23

Notes
1. US$1 = 105 Pakistani rupee.
2. Denoting or relating to meat prepared as prescribed by Islamic law.
3. British term for slaughterhouse.
4. Literal translation from Urdu is ‘special’.
5. A Muslim festival.
6. Literal translation from Urdu is ‘sacrifice’.
7. Information on feedlot farms was based on discussions with industry experts and practitioners.
8. This section was based on information collected from company sources and preliminary prospectus of Al Shaheer
Corporation.
9. Five-year Pakistan Investment Bonds (PIB) Rate.

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