Inbox Tech Plans IPO as Pakistan Moves on From Manual Paperwork

(Bloomberg) -- Inbox Business Technologies Ltd. plans to raise about 1.5 billion rupees ($14 million) in an initial public offering as Pakistan's largest IT company by domestic revenue seeks to take advantage of a shift away from manual paperwork.

The company plans to sell a 39 percent stake in the IPO scheduled for June, Chief Executive Officer Mir Nasir said in an interview in Karachi. He is targeting a doubling of revenue to $100 million in five years.

Pakistan has been slow to move to digital adoption, with government departments still adhering to old fashioned ways. Now that is changing, opening up opportunities for companies such as Dell EMC and Inbox for services like those offered by India's outsourcing giants. Prime Minister Nawaz Sharif's government is targeting disruption to outdated practices to fuel an economy growing at the fastest pace in more than a decade ahead of elections next year.

“Our own industries are now starting and taking notice of the digital disruption concept and they are getting more and more automated,” Nasir said. “You need Pakistani Tatas and Wipros.”

Inbox started as an assembler of computers and laptops in 2001 before transforming itself into a managed services provider company seeking long-term contracts to handle infrastructure and systems for customers.

The government is Inbox's biggest customer, generating about 80 percent of its revenue, said Nasir. Other big spenders in the sector are telecommunications companies and banks. Most of the funds raised from the listing will be used to bid for future contracts that will require upfront investment.

The company handles one of the Sharif government's largest projects, an urban mass transport system in the cities of Lahore and Rawalpindi. That includes installation and maintenance of automated fare collection, bus scheduling and vehicle monitoring systems.

Dell EMC, part of Dell Inc., has put an increased focus on Pakistan, the second-largest economy in South Asia.

“Pakistan is bigger than I thought,” Chee Wei Chue, vice president for Asia Emerging Markets at Dell EMC, said May 23 in his first visit to Karachi. “It's a huge place of flat land and there was some foundations being laid. It confirms my feeling that Pakistan has huge potential or hidden goldmine for investors.”

To contact the reporter on this story: Faseeh Mangi in Karachi at fmangi@bloomberg.net.

To contact the editors responsible for this story: Arijit Ghosh at aghosh@bloomberg.net, Robert Fenner, Chris Kay