3rd IPO Scheduled for Next Week

The Iranian equity market’s third initial public offering of the year is set to take place next week, with Parsian Kowsar Hotel’s shares being prepared for offering to the public.

Fifteen percent of the international hotel’s shares will be made public during the week, Bourse Press reported.

“PKHZ”, which is the 58th company listed at IFB, has realized 888 rials of earnings per share in the last fiscal year (started March 21) and has forecasted an earnings per share of 1,023 rials for the current year.

Parsian Kowsar has achieved 368 rials or 36% of the target during the first quarter of this year (March 21-June 21). Its initial market capitalization stands at 110 billion rials ($28.49 million).

The hotel operates with 190 personnel and its two major stakeholders include Parsian Tourism and Recreational Centers Holding and the Islamic Revolution Mostazafan Foundation with 51% and 49% shares respectively.

Its IPO at IFB is also reportedly undertaken by Behgozin Brokerage.

"The Isfahan-based Parsian Kowsar’s sales and profits increased by 35% and 40% respectively in the last fiscal year," said its managing director, Mohammad Ali Aboutalebi, adding that the hotel is aiming for 30% and 35% growth respectively this year.

IPOs made their return to the equity market after a five-month hiatus in early July. The first was a 5% stake in Behpardakht Mellat made up of 47.5 million shares offered on Tehran Stock Exchange with the initial market capitalization of 950 billion rials ($25.13 million). Its IPO was received favorably by traders, raising its forecasted EPS and market cap.

The second IPO took place on August 8 for the telecoms company MobinOne Kish, with 10% of its shares offered on IFB. Its market cap stood at 100 billion rials ($2.63 million) and its EPS and P/E ratio reached 533 rials and 1.88 respectively, according to data by Securities and Exchange Organization.

Before the two recent offerings, all IPOs on the Iranian equity market had been suspended since early February.

According to Mohsen Khodabakhsh, an official with SEO, the suspension was aimed at “supporting investors and preventing liquidity flight”.

Late last year, several heavyweight IPOs had caused a sudden movement of capital from the market due to their large size, indirectly pressuring small investors to sell, which promped market regulators to stop public offerings until further notice.

According to Hassan Qalibaf-Asl, the head of Tehran Stock Exchange, at least 45 companies have asked to list their shares since the Iranian year started in March, and he expects as many as 13 IPOs within the 12 months, compared with the seven in the previous year's corresponding period.