Dalda Foods Ltd, the largest maker of cooking oil in Pakistan, is proposing an initial public offering to finance the expansion of its manufacturing capacity.
According to Aziz Jindani, the company’s CEO, the company hopes to generate between 3.3 billion rupees ($14 million) and 4.6 billion rupees through a share sale that could occur before Ramadan begins on March 22.
According to data provided by Bloomberg, Dalda’s IPO would be the largest by a Pakistani consumer staples company at 4.6 billion rupees. It would also be the largest since Air Link Communication Ltd.’s 6.4 billion rupees initial public offering in September 2021.
“This particular IPO is intended to fund the expansion of Port Qasim,” Jindani, 44, said in an interview last week, referring to the company’s plant at one of the busiest shipping ports in the country. He stated that the funds might be used to develop its capacity in Karachi to extract oil from seeds. He stated that it may reach 900 tonnes per day, more than tripling the existing rate.
According to Shahid Ali Habib, chief executive officer of Arif Habib Ltd., the only advisor to the IPO, the offering might comprise the sale of approximately 50 million shares, two-thirds of which would be new and the remainder held by current owners.
Dalda dates back to 1937, when Unilever Plc introduced the detergent to the region. In 2004, Unilever sold Dalda’s Pakistan business to Westbury Group, which was owned by Bashir Jan Mohammad and other employees. According to its website, Dalda has moved into the production of liquid tea whitener in addition to cooking oil.
Despite increasing prices and a downturn in economic growth, consumers in the South Asian nation continue to purchase cooking oil, since it is viewed as a requirement for households. The category is recession-proof, according to Jindani.
He stated that the company’s revenues had increased by an average of 27 percent per year since 2018. The income reached 88 billion rupees during the fiscal year of 2022, more than other significant food producers in the country such as FrieslandCampina Engro Pakistan Ltd. and National Foods Ltd.
Jindani stated that Dalda’s products account for approximately five percent of the $8 billion cooking oil market. The IPO could assist Dalda in capturing a greater portion of Pakistan’s fragmented edible oil market.
