In a nation with one of the highest per capita consumptions of edible products, the possibility of the largest edible oil producer announcing an Initial Public Offering (IPO) ought to be significant news. In Pakistan, however, Dalda’s hint of an initial public offering (IPO) on the Pakistan Stock Exchange (PSX) has been met with cautious anticipation. This article explores Dalda’s long-held aspirations for an initial public offering, its historical significance, and the factors that have delayed this highly anticipated move.
In 2017, Dalda, a company with roots dating back to the pre-independence era, declared its intention to go public for the first time. In the past, the company intended to issue 8.25 million shares via book-building at a minimum price of Rs 85 per share. The objective was crystal clear: to secure funding for the expansion of its seed extraction facility and 500-tonne-per-day increase in seed processing capacity. However, this plan encountered delays and obstacles.
Dalda’s origins trace back to 1930 when a Dutch company named Dada, in collaboration with Lever Brothers in London (now Unilever), introduced “Vanaspati Ghee” to the Indian subcontinent. This innovation revolutionized cookery by providing a cheaper alternative to traditional clarified bovine milk ghee. Vanaspati Ghee’s triumph signified the commencement of Dalda’s extraordinary voyage in the edible oil industry.
The exceptionally high utilization of edible oil in Pakistan, particularly Vanaspati Ghee, is driven by dietary preferences and increasing per capita income. With palm and soybean oilseeds comprising nearly 90 percent of oilseed imports, Dalda holds a strategic position on the market. As the global consumption of oilseeds continues to rise, Dalda intends to increase its oil pressing capacity to satisfy the growing demand.
Following its 2003 acquisition by the Westbury Group, Dalda embarked on a path of accelerated expansion and diversification. It expanded into international markets, introduced new brands, and acquired a controlling stake in Wazir Ali Industries to bolster its market position. Notably, Dalda’s revenue increased dramatically in 2012, reaching Rs 22,6 billion.
Despite these achievements, Dalda’s IPO remained elusive, despite numerous announcements and delays. According to their brokerage firm, Arif Habib Corporation, market conditions were unfavorable. The market sentiment improved after Pakistan joined the IMF program, which altered the circumstance. Dalda has not yet announced a specific IPO date, citing the need to closely monitor market conditions.
The primary objective of Dalda’s IPO is to raise capital for the expansion of its Port Qasim facility, which will increase seed pulverizing capacity from 400 to 900 tons per day. This expansion seeks to leverage on the expanding demand for edible oil resulting from urbanization and rising consumer health consciousness. The corporation estimates that Pakistan will consume approximately 4.5 million kilograms of edible oil annually.
In 2022, Dalda’s retail value market share in edible oils and alternatives is substantial, at 19.9%. The company has a significant presence in dairy products and culinary ingredients in addition to consumable oils.
Dalda, a company with a storied past and a significant presence in Pakistan’s edible oil industry, has hinted at going public for years. The initial public offering, which is intended to finance an expansion of its seed extraction capacity, has the potential to alter the competitive landscape. However, the repeated delays of the IPO raise doubts about when Dalda will eventually go public. The company’s expansion and its impact on various industries continue to be the subject of intense interest and speculation as market conditions change and Dalda continues to develop.
