#1Listing on Pakistan Stock Exchange Small and Medium Enterprises Board Dream Big and Make it Happen! PSX#2Contents of the Presentation: Psx Introduction PSX Listing Requirements SME Board Listing Requirements Post Listing Listing Fee Benefits And Relaxations SME Listing Procedure 2#3PSX Introduction 3#4What is an IPO? Psx IPO An initial public offering (IPO) is the process where a company issues a stake of its ownership to the public for the first time. Investors who wish to gain ownership in a company subscribe to the company's shares. 4#5Importance of SMEs to the Pakistani economy Psx SMEs have the potential to drive / stimulate growth provided they are given an enabling platform to flourish. KHYBER PAKHTUNKHWA There are Approximately 3 Million SMEs in Pakistan GILGIT-BALTISTAN AZAD KASHMIR SME output contributes 40% to the annual GDP SME Output contributes 25% to the total exports. ISLAMABAD FEDERALLY ADMINISTERED TRIBAL AREAS BALOCHISTAN SINDH PUNJAB SMEs employ 80% of the non-agricultural labor force Source: Small and Medium Enterprise Development Authority (SMEDA) 5#6PSX PSX Listing Requirements 6#7What is the Eligibility Criteria? Psx Main Board • Minimum post issue paid up capital of Rs.200 million SME Board • Post issue paid up capital between Rs.25- 200 million 7#8PSX SME Board Listing Requirements 80#9What are the SME Board Requirements? PSX SME Board - a platform for SMEs to raise capital to fund growth and expansion SHOP ✓ At least 20% of post issue paid up capital to be offered ONLY to QIBS and HNWIS through private placement. QIBS (Qualified Institutional Buyers) Financial Institutions; Insurance Companies; Mutual/Pension Funds HNWIS (High Net Worth Individuals) Investor bidding at least Rs.1 Million ✓ Minimum five initial subscribers SME: A public company having a post issue Paid Up Capital PKR 25-200 Million ✓ Minimum Bid size of each initial subscriber: PKR 1 Million 6#10What are the mandatory requirements? Psx Financial Statements SME Website • Must prepare periodic Financial statements. Must audit statements by QCR (Quality Control Review) rated chartered accountants. • Must publish financial statements on the website. Must contain basic business information. Must contain Information Memorandum • Must post annual, half-year quarterly accounts. 10#11What is the Listing Requirement? Psx Information Memorandum (Pre Listing) ⚫IM shall be circulated to QIBS and HNWIS. ⚫IM shall be placed on the website of the SME, the Exchange and the Advisor/Consultant to the Issue. • Minimum information / disclosures required in the IM are contained in Schedule-I of Chapter 5A of PSX Rule Book. Compliance (Post Listing) • SME required to disclose and disseminate Price Sensitive Information. • CEO of the SME responsible for regulatory compliance: Must submit compliance report at the end of each half year. • If SME violates any provision of SME Regulations, Exchange may take any disciplinary action such as: Imposing a fine, Placing SME in the Defaulters' Segment, Suspend trading, etc.#12PSX Post Listing 12 12#13What happens Post Listing? Psx ✓ Sponsor Shareholding Lock-in 100% (Entire) holding blocked for 1 year. 25% holding blocked for 3 years. 16% 30% ✓ Clearing, settlement and risk management through NCCPL. 250- 20% 34% 50% 200- 150 100- 50- 0- 5 6 7 8 9 10 ✓ Trading shall take place through KATS (Karachi Automated Trading System) ✓ In the secondary market, the minimum order size for trading shall be PKR 100,000. SME to maintain a minimum free float of 20% of post issue paid up capital. 13#14PSX Listing Fee 14#15What is the Listing Fees? Psx S Initial Listing Fees ⚫0.05% of Post Paid Up Capital • Capped at PKR 50,000 Annual Listing Fees • PKR 20,000 on Paid Up Capital up-to PKR 50 Million • PKR 30,000 on Paid Up Capital between PKR 50-100 Million PKR 40,000 on Paid Up Capital exceeding PKR 100 Million 15#16PSX Benefits And Relaxations 16#17Why should you list on PSX? Psx Raise Long Term Low-cost Capital Growth and expansion needs Invest or carry out merger & acquisition plans Invest in new projects Enhance current capacity $ ☐ Diversify business ☐ Meets working capital requirements Inclusion in Indices Inexpensive Financing The PSX has several indices like KSE 100, a benchmark used by investors all around the world to measure Pakistan's performance. Listing will give you the chance to be included in these indices, providing you with global recognition. Money raised through offering your company's share on the bourse is relatively inexpensive, especially in a rising interest rate environment, helping organizations reduce their dependence on costly long term and short term loans. → $ $#18Why should you list on PSX? CHIC Psx Tax Benefits Enhances Company's Public Profile Higher Valuation 20% on tax payable in the first tax year of listing 20% on tax payable in the subsequent tax year 10% on tax payable in the following two tax years respectively IPOS add a level of prestige to a Company IPOs can be used as a branding and marketing tool as they attract media interest, attention and scrutiny Listed companies on the Exchange are regarded as Industry leaders in their respective sectors. By going public, all stakeholders involved use fair valuation of the company by the market which is generally higher than the book value, outlining the true worth of an organization. Attract and retain the best talent for your company HR Capital because of enhanced reputation. TAX E☑ 18#19PSX SME Listing Procedure 19#20Procedure to get your company listed on the Exchange? Appoints Advisor and Consultant Business Plan evaluation Finalization of Underwritings •Your company chooses a consultant, who does the initial due diligence in regards to financials, corporate structuring, legal and regulatory requirements etc., and formulates your company's business plan moving forward. . Regulatory Filings The business case is evaluated by the consultant using different methodologies and its demand is gauged for the "Final Offer Structure" to get maximum value for the shares to be offered. After the terms of underwriting have been finalized. bankers to the issue and share registrar are appointed. •The Central Depository Company (CDC) checks for eligibility and induction into their virtual share depository system. Finalize pre-IPO investors with the help of your consultant Submit requisite regulatory documents for PSX and SECP and obtain the necessary approvals. Marketing Subscriptions and Balloting PSX Post IPO Clearance • Conduct road-shows, investor presentations and other marketing and sales events to create awareness about the upcoming IPO. Share registrar and balloter collect subscription results form all bankers to the issue. The bank will transfer the money from the subscriber to the issuers. •The company's lots sizes of PKR 100,000 can be traded on the SME Board. 20#21Contact Information PSX Marketing and Business Development Karachi Haris Saeed - Business Development Manager Email: [email protected] Telephone: +92-2135274574 Ext: 4582 Lahore Sarmad Hussain - Regional Head Email: Sarmad. [email protected] Telephone: 111-001-122 Ext. 4653| Direct: 021- 2894653 Islamabad Asghar Abbas Naqvi - Regional Head Email: [email protected] Telephone: 111-001-122 Ext. 4666| Direct: 051- 2894666 Help Desk (92-21) 111-011-122 Email: [email protected] 21#22Contact Information Serving Investors & Industry Stock Exchange Building, Stock Exchange Road, Karachi-74000, Pakistan. Tel: (+92)111-001-122, Website: www.psx.com.pk PSX 22 22