Zara Supplier Service Global Plans $10 Million Pakistan IPO


Service Global Footwear Ltd., Pakistan’s largest shoe exporter, is planning an initial public offering in the domestic market to raise funds to invest in its parent’s tire joint venture.

The Lahore-based company plans to raise at least 1.6 billion rupees ($10 million) by offering 41 million shares at a floor price of 38 rupees each, according to Shahid Ali Habib, chief executive officer at Arif Habib Ltd., the sole adviser to the IPO. The price could be boosted by as much as 40%, meaning Service Global Footwear could raise as much as $14 million, Habib said. The company is scheduled to start taking investor orders as soon as the last week of March, he added.

Service Global Footwear is part of Service Industries Ltd., which has more than 13,000 employees and is known for its shoes and tires in Pakistan. The footwear unit supplies brands including Inditex SA’s Zara, Levi Strauss & Co.’s Dockers and Reckitt Benckiser Group Plc’s Scholl. The business has an annual revenue of about $44 million and exports to European countries such as Germany, France and Italy. It has a capacity to produce 3.6 million pairs of shoes annually.

A representative for the parent confirmed the details of the unit’s IPO plans.

Service Industries rose as much as 6.4% to a record 985 rupees in Karachi trading as of 12:15 p.m. local time.

The shoemaker is joining a global rush to tap capital markets for funds, riding on strong investor sentiment. Pakistan’s benchmark KSE-100 Index’s 33% gain in the past year has encouraged the country’s first-time share market, which is seen as heading for a record year.

Zara Supplier Service Global Plans $10 Million Pakistan IPO

Service Global Footwear plans to use the IPO proceeds to buy about 20% stake in a joint venture set up by Service Industries and China’s Chaoyang Long March Tyre Co., Habib said. The business will manufacture truck and bus radial tires in Pakistan for export from a factory near Karachi. At a cost of about $250 million over seven years, it’s the largest investment in a tire manufacturing plant in the country. The first phase will start operations in August.

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