Long March eyes IPO to add passenger car tire capacity in Pakistan

Karachi, Pakistan – Service Long March Tyres Ltd (SLM), part of China’s Long March Group, is moving ahead with plans for an initial public offering on the Pakistan Stock Exchange (PSX) in May, with proceeds earmarked mainly for expansion into passenger car radial (PCR) tire production.

According to an official PSX notice seeking public comments on the prospectus, SLM plans to offer 389.738 million ordinary shares, and raise proceeds of between PKR5.5 billion (€17 million) and PKR7.8 billion (€25 million) through the IPO at a ‘floor price of PKR14.25/ share and a maximum strike price of PKR19.95/share.'

The proceeds will be utilised to “partially finance” the establishment of a dedicated passenger car radial (PCR) tire manufacturing facility, said the prospectus published 14 April.

The total estimated cost of the PCR project, the prospectus said, is PKR22.5 billion, which is expected to be funded through a “balanced mix of IPO proceeds, internally generated cash flows, and long-term financing.”

Work on the project is expected to commence in the fourth quarter of fiscal year 2026 (ending 30 June 2027), said SLM.

The first phase of the project has an annual production capacity of 2 million units and is scheduled to officially start production in January 2028.

By 2029 and 2030, annual production capacity will increase to 2.5 million and 3 million units respectively.

The proceeds from the IPO will be allocated towards: ‘building - including civil and infrastructure works for the facility’; and ‘plants and machinery for the unit’.

SLM said the expansion represented “a strategic capacity enhancement initiative” designed to both increase production volume and to diversify its revenue streams and addressable market.

With the dedicated PCR plant, SLM said it will be able to cater to "a rapidly growing segment of the automotive market, reduce dependence on imported products, and strengthen its ability to meet both domestic and international demand.”

Established in 2019, SLM is a joint venture 49% owned by China's Long March and 51% owned by local company Service Industries. (ERJ report)

The company currently operates a truck & bus radial tire manufacturing facility in Pakistan’s Sindh Industrial Trading Estate with an installed capacity of 1.6 million units per year.

The TBR capacity, according to the prospectus, is set to increase to 2.2 million units per year by fiscal year 2028.