TPL Trakker plans IPO to raise Rs1.4 billion for vehicle, container tracking business growth

KARACHI: TPL Trakker is planning for an Initial Public Offering (IPO) to raise Rs1.4 billion in order to grow vehicle and container tracking business, analysts said on Tuesday.

TPLCorp Limited (TPL) held a Corporate Briefing on November 18, 2019 to discuss the financial results of FY19 and future outlook of the company, said analysts at Arifh Habib Limited.

In order to further grow in the vehicle and container tracking business, IoT Business as well as expand into markets abroad, TPL Trakker will file for an IPO, aiming to raise PKR 1.4 billion.

Moreover, the company is in talks with two foreign strategic investment partners for equity injection.

TPL Group includes TPL Trakker Limited, TPL Insurance, TPL Properties, TPL Life, TPL Maps, TPL Security Services Private and TPL Rupiya.

Despite decline in sale of vehicles, TPL Trakker business reported revenue growth of 7 percent YoY led by Container Tracking and new IoT Business.

During the year, the company launched four IoT businesses (video telematics, fuel management solution, water management solution and smart warehousing and inventory management) and usage based insurance.

Moreover, the company is also venturing into software-as-a service platforms, such as Pay-How-You-Drive Insurance and Predicative Maintenance.

Though, investment in new business initiatives and higher interest rates led to decline in Bottom-line of the business by 63 percent YoY in FY19, the analysts said.

TPL Maps and TPL Rupiya are now merged with TPL Trakker Limited since these companies will benefit from TPL Trakker’s large customer base along with TPL Trakker benefiting from technical expertise of TPL Maps.

TPL Maps during the year has developed four new solutions; i) goconnect (location based advertising service), ii) LEAP (solution with respect to demographics, based on location), iii) TPL Maps Service (serving clients such as Bykea, Ufone, Telenor, Cheetay and Eat Mubarak) and DART (solution related to workforce and supply chain monitoring, currently serving KFC and Dominos).

Furthermore, TPL Maps Solution will be making its way in Middle East market in 2020, partnering with HERE Technologies.

In order to further grow in the vehicle and container tracking business, IoT Business as well as expand into markets abroad, TPL Trakker will file for an IPO, aiming to raise PKR 1.4bn.

Moreover, the company is in talks with two foreign strategic investment partners for equity injection.

TPL Insurance has entered into the company’s first livestock insurance covering 2000 cattle’s in Thar District.

Furthermore, Afghan Transit Trade Guarantee was also initiated in July 2019. Other than this, TPL has also entered into partnerships with nine companies in Pakistan.

The company has also launched a mobile app which can instantly start insurance plans without many formalities and documentations.

In the TPL Properties Business, the revenue has climbed up by 8 percent YoY in FY19, on account of growth in rental income.

Furthermore, the company has ventured into providing real estate development services to corporates.

However, due to cessation of commercialization in Karachi land acquisition of Project Alpha has been delayed.

Whereas, for Project Beta a new real estate commercial land is being acquired, which will be used for mixed purposes such as Hotels and offices.

Furthermore, One Hoshang Project, which will be a residential apartment tower and showroom, is slated to be completed in 2023.

Moreover, the company is underway to enter into REIT management business. With this, Centre point building will be included in REIT Scheme. Along with this the company also plans to setup Logistics Park.

In TPL Life Business, the topline has seen 31% YoY in FY19, amid time based life insurance via mobile. The company offers usage based life insurance for individuals through mobile app.

Also TPL Sahulat, health solution via mobile app, is also successful. The app offers doctors at home, delivery of medicines at home, lab tests at home and settlement of claims. Furthermore, in order to target low income earners the company offers Life Insurance through scratch cards, available at as low as Rs375. For the purpose of growth, the company seeks funding of PKR 400-500 million.

The company is currently working on developing a social and corporate messaging platform (Tello Talk) which will enable the users to transfer payments and manage transactions with businesses.

Furthermore, its rider service app will provide a delivery platform to e-tailers (online retailers).

Overall, consolidated profit after tax of TPL Corp plummeted by 74 percent YoY, settling at Rs172 million in FY19 against PKR 670 million in the FY18.

This massive decline is attributable to Pak Rupee devaluation against USD, and interest rate hikes.

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