Market directory
Pakistan: an issue otherwise than right, priced at a moment
Pakistan does not floor the price of a further issue of shares otherwise than by way of right. It fixes the moment instead. The Companies (Further Issue of Shares) Regulations 2020 require the board's proposal to put the three-month average market price and the latest market price in front of the members, so the price is justified once, in advance.
Key takeaways
- Two prices go to the members, and both look backwards. The board's proposal must state the average market price during the last three months preceding the board's decision, together with the latest available market price.
- No minimum price is prescribed. Unlike SEBI's formula across the border, the Regulations set no floor for a non-rights issue. The discipline is disclosure and a members' vote.
- Pakistan has a lock-in, and it arrived in 2024. S.R.O. 361(I)/2024 imposed a lock-in on sponsors and a standard lock-in for persons other than sponsors in a further issue other than right, with an exit opportunity for dissenting shareholders.
What "otherwise than right" means here
Pakistani corporate vocabulary is not the vocabulary of the rest of this directory. The default route for a listed Pakistani company raising equity is the right issue — singular, in local usage — offered to the existing register. Everything else is an issue otherwise than right, treated as an exception to be justified rather than an ordinary corporate act, and the Regulations carry a chapter headed for exactly that. They were notified as S.R.O. 231(I)/2020 under the Companies Act 2017 and amended with effect from March 2024.
The board's proposal, and the two prices in it
The operative machinery is a list of contents. Before an issue otherwise than right goes to the members, the board's proposal must state the average market price of the share, in the case of a listed company, during the last three months preceding the board's decision, together with the latest available market price. Where the consideration is other than cash, the value of the assets, services or intangibles must be set by a valuer, on a valuation no older than six months at submission.
Notice what is absent. No minimum price. No maximum discount to the three-month average. The Regulations do not tell the company what to charge; they tell it what to disclose, and leave the members to decide. That is materially more permissive than India's mandatory ICDR floor, which computes a minimum and gives the board no discretion below it.
Why that still stops a refixing conversion price
A market with no pricing floor sounds like one where a discount to a trailing average should be easy. It is not, and the reason differs from every other constrained market here. The Pakistani procedure is anchored to a single moment: the board's decision. The three-month average is measured to that date, the latest market price is stated as at it, and the members approve an issue described by reference to those two numbers. A conversion price discovered afresh at each conversion has none of those properties. Pakistan never prohibits the discount. It simply requires the two prices to be stated as at the day the board resolves, and a number that will not exist until some later conversion cannot be one of them.
| The structure needs | What the Regulations require | Where the friction is |
|---|---|---|
| A price discovered later | Two prices stated as at the board's decision | No slot for a deferred price |
| A discount negotiated privately | No prescribed floor and no prescribed maximum discount | None — this is the permissive part |
| Repeated issuances on demand | A board proposal and a members' resolution per issue | Each draw is a fresh process |
| Stock saleable on delivery | A standard lock-in, added in 2024 | The back end is not free |
| Not an offer, a quote, or a rate card. | ||
The 2024 amendments closed the back end too
It would be tempting to read a market with no pricing floor as one whose back end is free. It is not. S.R.O. 361(I)/2024, notified in March 2024, added a lock-in on sponsors and a standard lock-in clause for persons other than sponsors in a further issue other than right, with an exit opportunity for dissenting shareholders. The period is deliberately absent here: the amending instrument could not be read directly, and a lock-in length is not a number to guess at.
What remains true is that Pakistan has no analogue to the American restricted-securities concept, so nothing resembling the Rule 144 holding period attaches to the security itself; the restriction is a condition of the issue. Shares of a class already quoted reach the market through an additional listing on the Pakistan Stock Exchange. Outside the securities rules, non-resident portfolio investment runs through a designated account arrangement, and repatriation depends on the investment having been recorded correctly from the start.
A discrete, approved subscription at a negotiated price remains coherent here. What does not fit is the deferred, repeated shape described on equity facilities and private placements by a public company. Send the last board decision date.
This verdict is provisional. Whether a Pakistani listed company may contract a conversion price that refixes against future market prices was not established either way for this note. The constrained tier is a holding position reflecting that gap; on the reasoning set out above, a closed verdict is at least as likely. Do not read it as a finding that the structure is available.
General information, not legal advice. The SECP's regulation text could not be read directly, so this page cites no regulation numbers and no lock-in period. The majority required for the members' resolution, the relevant section of the Companies Act 2017, the Commission's role in approving an issue and State Bank of Pakistan foreign-exchange requirements were not verified and are not asserted. Take advice from qualified Pakistani counsel before acting.
Related reading
Market
India
The instructive opposite next door: a computed floor, not a disclosure duty.
SEBI ICDR preferential pricing →Market
Philippines
A vote and a document before every non-pre-emptive issue, plus a par floor.
The par floor and PSE Article V →Market
Indonesia
A shareholder meeting for every use of the placement channel, and a cap.
HMETD, PMTHMETD and the cap →Primary sources
- SECP — Companies (Further Issue of Shares) Regulations 2020, updated 4 March 2024
- SECP — S.R.O. 231(I)/2020 notifying the Regulations
- SECP — S.R.O. 361(I)/2024, the 2024 amendments
- Pakistan Stock Exchange — rule book and listing regulations
Financing a PSX-listed issuer: frequently asked questions
Does Pakistan set a minimum price for shares issued other than by way of right?
No. The Companies (Further Issue of Shares) Regulations 2020 prescribe no minimum price for an issue otherwise than right. What they prescribe is what the board must tell the members before they vote: the average market price over the last three months preceding the board's decision, and the latest available market price. The discipline is disclosure and a vote, not a computed floor.
Why does that still stop a refixing conversion price?
Because the procedure is anchored to a single moment, the board's decision. The three-month average and the latest market price are stated as at that decision, and the members approve an issue described by reference to them. A conversion price discovered afresh at each conversion has no board decision date to be measured against, so it does not fit the shape of the approval the Regulations require.
Is there a lock-in on shares issued other than by right in Pakistan?
Yes. S.R.O. 361(I)/2024, notified in March 2024, imposed a lock-in on sponsors and a standard lock-in clause for persons other than sponsors in a further issue other than right, alongside an exit opportunity for dissenting shareholders. We do not state the period, because the amending instrument could not be read directly and a lock-in length is not a figure to estimate.
When is a valuation report required?
Where the shares are issued for consideration other than cash. The Regulations require the value of the assets, services or intangibles to be determined by a valuer, and the valuation may not be older than six months from the date of submission. A cash subscription does not trigger the requirement, which is a useful distinction for anyone told a valuation is needed for every non-rights issue.
If this is about a live situation
Pakistan sets no floor, but it does fix the moment: the price is justified to members once, in advance, and the 2024 lock-in then decides when anything can be sold. If you are a PSX issuer weighing an issue otherwise than by way of right, the instrument comparison matches those two constraints to a structure.