IPOs on PSX: Book Building, Retail Portion and Applying

What a PSX IPO is

An IPO (initial public offering) is when a company sells its shares to the public for the first time and lists them on the Pakistan Stock Exchange (PSX). After listing, the shares trade on the exchange like any other listed stock. If you are new to the market, start with PSX explained and PSX basics.

The supervisor is the Securities and Exchange Commission of Pakistan (SECP), with trading in listed securities and commodities only via SECP-licensed securities and futures brokers. In the SECP's words: "In Pakistan, trading in securities of listed companies and commodities can only be carried out through SECP-licensed securities and futures market brokers." This also applies when you apply for an IPO through a broker.

How book building works

Many PSX IPOs use book building, a method of finding the share price through bids.

• The company and its advisers set a floor price, which is the lowest price at which bids are accepted. Some offers also set a price band.
• Institutional and high-net-worth investors place bids that state how many shares they want and at what price.
• The bids are collected in a "book". The strike price is set from this book, and it is the price at which the shares are issued.
• Bidders who bid at or above the strike price receive shares. Bids below the strike price are not accepted.

Some IPOs use a fixed price method instead, with a single price set in advance. The prospectus states which method applies.

The retail portion

The offer is usually split. The book-building portion goes to the bidders described above. The retail portion is offered to the general public, usually at the strike price found in book building.

What a retail investor should know:

• You normally do not bid a price in the retail portion. You apply for a quantity at the strike price.
• If retail demand is larger than the shares on offer, the IPO is oversubscribed and shares are allotted by the method set out in the prospectus. You may receive fewer shares than you applied for, or none.
• Money for shares you do not receive is refunded. The prospectus explains how and when.
• The size of the retail portion, the minimum application, and the allotment rules differ from offer to offer. Read them in the prospectus. We do not state them here.

How to apply for an IPO in Pakistan

The steps below are the general path. The prospectus of each IPO lists the exact channels, dates and documents.

1. Open a trading account with an SECP-licensed broker. See Open trading account. On finding a broker, per the SECP, lists of licensed brokers are on the PSX and PMEX websites.
2. Have a CDC account or sub-account. Shares are credited electronically, so you need a CDC account or sub-account. See CDC accounts.
3. Read the prospectus. It covers the business, the risks, the use of the funds, the price method and the subscription dates.
4. Apply during the subscription period through the channels named in the prospectus. These may include your broker, banks acting as bankers to the issue, or an electronic application facility. Fund the application from your own account.
5. Check the allotment after the subscription closes. Allotted shares appear in your CDC account, and the stock begins trading on PSX after listing.

Overseas Pakistanis can read Roshan Digital and PSX for how that route works.

Upcoming IPO in Pakistan: where to check

We do not keep a list of upcoming IPOs, because dates and terms change. Check these sources directly and note the date you checked:

• PSX website. It carries IPO announcements, prospectuses, book-building results and listing notices.
• SECP. It publishes approvals of prospectuses and press releases.
• Your broker. Your broker can tell you which offers it handles and how it accepts applications.

Be careful with IPO "allocations" offered over WhatsApp or social media. The SECP has warned about fake platforms, including look-alikes of real firms. Examples are SECP warnings by press release naming platforms (Quotex 09.04.2025; IBKR look-alikes, IGIL Securities, BMA Capital No.108 etc. 22.05.2025; Hillhouse Capital, S-169 Wharton 13.01.2026), none of which names Exness. Only deal with licensed brokers through their official channels. See Law and regulators.

Risks and costs

• The price can fall. A share can trade below the IPO price after listing. Your loss can be large, and subscribing does not guarantee a gain.
• Allotment is uncertain. In an oversubscribed offer, your capital is tied up until refunds are processed.
• Tax. Selling shares can create capital gains tax. See Capital gains tax and check current FBR rules.
• Shariah screening. If this matters to you, check whether the company is in a Shariah-compliant PSX index (see the Shariah PSX indices) and read Islamic finance.

Size your application so that a loss would not hurt your finances. See Risk management.

Frequent questions

What is IPO subscription in Pakistan?

It is the period during which the public applies for shares in a new offer. The dates are set in the prospectus and announced on PSX.

Can I choose my price in the retail portion?

Usually not. Retail investors normally apply at the strike price set in book building. The prospectus confirms this for each offer.

Do I need a CDC account to apply?

Yes. Shares are held electronically, so you need a CDC account or a sub-account through your broker.

Will I get all the shares I apply for?

Not if the offer is oversubscribed. Allotment then follows the rules in the prospectus, and the unused amount is refunded.

Where can I check that my broker is licensed?

According to the SECP, broker lists are on the PSX and PMEX websites. Use only brokers on those lists.

Is an IPO safer than buying listed shares?

No. An IPO carries the same market risk as any share. The company may also have a shorter public record, and the price after listing can be below the offer price.