GPH Ispat eyes $150 million Hong Kong listing to expand production
The funds raised will be used to establish a new plant with an annual production capacity of 5 lakh tonnes of billet and rod
GPH Ispat Limited has announced its intention to raise $150 million through an initial public offering (IPO) on the Hong Kong Stock Exchange to finance its new project aimed at expanding production capacity.
The decision to pursue the listing was approved during a board meeting held on 23 January, according to officials familiar with the matter.
To ensure a smooth listing process, the company has appointed PricewaterhouseCoopers Ltd (Hong Kong) and Price Waterhouse & Co Chartered Accountants LLP (India) as advisory partners the sources said.
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A delegation led by GPH Ispat's Managing Director, Mohammed Jahangir Alam, will visit Hong Kong from 4 to 6 February to engage in discussions with key stakeholders, they added. Members of the delegation include officials from the Stock Exchange of Hong Kong Limited, issue manager Altus Capital Limited, and underwriter Lego Corporate Finance Ltd.
Speaking to The Business Standard on the matter, Jahangir Alam revealed that the funds raised will be used to establish a new plant with an annual production capacity of 5 lakh tonnes of billet and rod.
"The estimated cost of the project is $185 million, with $150 million expected to be raised through the Hong Kong listing," he said.
He noted that the listing process is still in its early stages and could take between six months to a year to complete.
Alam highlighted two primary reasons for opting for an overseas listing. First, the local stock exchanges lack the capacity to raise such a substantial amount of capital.
Second, securing loans for the project is not feasible due to unfavourable terms. Local banks typically offer loans with high interest rates and a maximum tenure of 5-6 years, while foreign banks, although offering longer tenures of up to 12 years, require repayment in foreign currency—a significant risk given the current economic climate.
"We need equity funding, which is why we are turning to the Hong Kong Stock Exchange," Alam explained.
He emphasised that equity financing is a more viable option compared to debt.
Its share closed at Tk20.70 on the Dhaka Stock Exchange.
