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Company is planning first IPO of the year
Book-building process over-subscribed by 2.24 times
With the completion of the second round of fund raising for the initial public offering (IPO) of the company, Hi-Tech Lubricants Limited (HTLL) is set to become the first-ever company to be listed on the recently integrated Pakistan Stock Exchange (PSX). Hi-Tech Lubricants Limited will also become the first IPO for the year 2016.
The general public offer portion for the offer of the shares of Hi-Tech Lubricants Limited (HTLL) for its ongoing initial public offering (IPO) process is going to be held from January 25 to January 27. In this stage, 7.25 million shares of the company will be offered at a price of Rs62.50 per share.
It may be noted that earlier on January 7, 2016, the book-building portion of the company was over-subscribed by 2.24 times by the high net worth individuals and corporate body, when due to a very high demand in the market, the share price of the company got a strike price of Rs62.50 per share against the offered price of Rs37 per share.
For the IPO of the company, Hi-Tech Lubricants had decided to offer a total of 29 million shares in the market. The company is expected to accumulate a sum of Rs1.8 billion from the market after the completion of its IPO process.
Mr. Hassan Tahir, the CEO of the company has expressed its confidence that like the over-subscription of the shares during the book-building process, the general public offering shall also be over-subscribed. He said that it was quite heartening to witness frenzy in the market for the demand of the company’s shares from the investors, which is a reflection of the confidence of the investors in the business plan of the company as well as other major sponsors and the management of the company. He said that being a lube business-oriented company, Hi-Tech is already the first of its kind company to be listed on the market, and some analysts are using Hi-Tech’s valuations to draw parallels to the potential valuations of the lube segment businesses of other Oil Marketing Companies in Pakistan.
The Hi-Tech Lubricants enjoys 13.6 percent market share in passenger car motor oil segment and an overall 5.5 percent share of the total machine lubricant market in Pakistan. HTLL’s solid market positioning and a widespread distribution network of 150+ distributors across Pakistan.
Hi-Tech’s product portfolio, under the brand name of “ZIC”, includes a wide range of specialty lubricants in automotive, industrial and marine segments, which are imported from SK Lubricants Ltd, South Korea, ensuring highest quality and maximum protection against engine and machine wear.
Arif Habib Limited is the lead manager, arranger and the book runner for both the IPO portions of the public offering of HTLL’s shares.
Company’s existence
Established in 1997, Hi-Tech Lubricants (Hi-Tech) was formed as an Association of Persons (AOP) in March, 1997 to market lubricants, imported from YU Kong Ltd (Now known as SK Lubricants Ltd), South Korea in sealed cartons, in Pakistan.
During the early days Hi-Tech established its own distribution in Lahore and created a sales team to educate the local market on the use of synthetic lubricants.
Expansion year 2000
With three years of local marketing experience, HTLL was ready to expand its footprint to other cities of Pakistan. In 2000, HTLL established its regional offices in Islamabad and Karachi with a dedicated sales force to handle local operations of those regions.
It was a big ask to an unknown brand and a young company to compete against the industry giants. HTLL management with focus and hard work achieved its challenges/milestones with effective controls. New door-to-door delivery systems were introduced to lubricant retailers and they were offered credit on product deliveries.
Education was given to the resellers and end customers on lubricant grade/applications. All mediums were used to educate the user and seller of lubricants. Their sales team played a pivotal role in creating ‘ZIC’ as a premium lubricant household name in Pakistan.
As a result of this hard work, by the end of year 2006, HTLL had gained substantive market share of the passenger car market and had a comprehensive distribution network across Pakistan.
Corporate social responsibility year 2010
A trust was established in the year 2010 by the name of ‘Sabra Hamida Trust’. The title of the trust was created keeping in mind the names of our founder member’s mothers. This trust was made to contribute and share their earnings back to community. Therefore a school named 18 ‘ILMGAH SCHOOL’ was founded under the umbrella of the trust. The school was targeted to deliver education to those children who are less fortunate and cannot afford English medium education basis on merit.
The school education curriculum was set as any other private school in the country with full access to free uniform, books, stationary and meals every day (with no tuition fee). The trust further supports brilliant student till their higher education at university level.
They believe that educating our younger generation and making them a better human being is their success. Their motive is simple “a brighter child today is a brighter Pakistan tomorrow”.
ISO certified year 2010
HTLL became an ISO certified company and they delivered as per as per 9001:2008 quality standards with excellent quality management system in place. They followed the principles to engage with the customers, sell products and retained sustainability. Their channels for supply chain and sales became risk free with more than 400 dedicated field force and support teams offering satisfaction at the doorstep of customers.
Takeover of AOP by limited liability company year 2011
In 2011, the AOP was bought over by Hi-Tech Lubricants (Pvt) Limited which in the same year was converted into a public unlisted company, now known as Hi-Tech Lubricants Limited (HTLL).
Blending plant year 2013
In 2013, HTLL diversified from trading to manufacturing and decided to invest in a wholly owned subsidiary, Hi-Tech Blending (Pvt) Limited, to set up a state-of-the-art blending plant in Bhai-Kot adjacent to Sunder Industrial Estate, Lahore.
The investment in blending will give HTLL the benefits of importing in bulk as compared to sealed cartons, hence reducing cost of lubricants and savings in other overheads.
The new plant will also produce its own HDPE bottle/Cap and filling lines for lubricant bulk imports. The local filling and bottle manufacturing will open new avenues for HTLL sales to OEMs and institutions but also in plastic related products manufacturing/trading.
The Company will have the ability to market lubricants to different automotive and industrial brands. Moreover, filling and packaging can be done on different SKUs. Government sector clients will be another addition to HTLL portfolio due to indigenous status.
