Lahore: Mughal Iron & Steel Industries Limited has announced the submission of its final right offer document for ordinary Class-C shares, dated November 05, 2024. The company has provided the necessary details to inform the TRE Certificate Holders of the Pakistan Stock Exchange accordingly.
The company has outlined significant financial details and changes arising from this right issue. The pre-issue net asset/breakup value per share stands at Rs. 77.87, which will adjust to Rs. 71.66 post-issue, indicating a decrease of 7.97%. Additionally, the gearing ratio is expected to improve from 1.324 to 1.205, marking a reduction of 9.53% post-issue. These changes reflect strategic financial management aimed at strengthening the company's capital structure.
Mughal Iron & Steel Industries Limited is set to finance a significant portion of its working capital requirements through this right issue, amounting to Rs. 1.50 billion. The remaining requirements will continue to be supported by bank financing and other means. The company's operating cycle, which integrates inventory, debtors, and payables, has shown a noticeable improvement, reducing from 83 days in 2023 to 45 days in 2024.
The financial highlights of the issuer over the last three years reveal a challenging yet resilient performance. Gross revenue for the year 2024 stood at Rs. 105.55 billion, up from Rs. 76.49 billion in 2023. However, the net profit after tax decreased to Rs. 1.999 billion in 2024, from Rs. 3.48 billion the previous year, reflecting the intensified market competition and rising operational costs.
According to information available from the Pakistan Stock Exchange (PSX), the company's equity at June 30, 2024, was Rs. 26.14 billion, with total assets amounting to Rs. 69.08 billion. The paid-up capital for ordinary shares remains unchanged at 335.63 million shares, with an additional 50 million ordinary Class-C shares post-issue.
Mughal Iron & Steel Industries Limited has been a prominent player in Pakistan's steel industry, with Mr. Mirza Javed Iqbal, the Non-Executive Director and Chairman of the Board, spearheading its growth. His visionary leadership has been instrumental in advancing the company's technological capabilities and achieving economies of scale.
The company's statutory auditors, Fazal Mahmood & Company, Chartered Accountants, and Muniff Ziauddin & Company, Chartered Accountants, have provided their expertise in ensuring accurate financial reporting. The management remains committed to maintaining transparency and adhering to regulatory requirements.
In conclusion, the submission of the final right offer document marks a significant step for Mughal Iron & Steel Industries Limited in bolstering its financial foundation. The company's strategic focus on enhancing its capital structure and operational efficiency is expected to position it favorably in the competitive steel market.