Sitara Petroleum IPO: Strike Price, Retail Expansion & OMC Transition | Nukta Business

Added: 2026-04-29

[00:00:02]Pakistan stock exchange of IPOs.

[00:00:07]One of the IPOs that are supposed to happen is of Sithara Petroleum Limited who's the chief executive officer of Satara Petroleum Limited. Thank you for being on the show. Sir, could you tell us about your company or accelerate into basically full scale OMC.

[00:00:35]Thank you so much organization. I mean this group is there in the petroleum business for the last 50 years and then you know they are fuel management company they are into transport. I mean this tank lorries also carriage contractors they famous and then they they they grew the business through their credibility because if you see you are giving the right quantity right quality of the products you build your credibility. So over the years they build the credibility and they were growing very fast and then when they were growing very fast they wanted to have it even more and more you know sort of professionalism >> and uh systemdriven company from individual-driven company. So recently with uh go uh going with Aramco >> we are their key logistic partner you know majority of their product is transported by us >> and also we run our about 61 gas stations. So we are very interesting company probably largest fuel management company in Pakistan. So I mean we were consolidating ourself and now since we are further growing so we thought let us you know public also participate in our growth and we enjoy as a bigger team.

[00:02:04]>> Absolutely.

[00:02:06]You talked about you are the largest go petroleum I think your logistics fleet is heavily tied to go petroleum long-term growth plan how do you plan to actually sustain with regards to it while being tied so closely to one single major contract yeah It is you know it is multiple things you know if you see we are not only logistic but we also managing go sites also 61 sites so we we are very close netted partner in the success of go >> and since now when grow and aramo are coming there they are together so their ambitions growth ambitions are very high >> and we are linking that you know I mean there is a linkage with our this even IPO that we want to add some Tankaris also so that you know we serve our customer the best way which is growth event was it a one-time event sustainably manage we we are you know making it sustainable because we are focusing in every aspect from where we can generate income for example we have hired a very specialist in NFR non fuel revenue so we are upgrading our shops convenience stores at the trade cloud so that there is more and more you know customers coming in and they not only buying stuff from the shop but also they are fueling their vehicle also. So we we are very much there.

[00:04:05]61 sites you currently operating investment prospect 47 petroleum pumps.

[00:04:21]I mean Jame we have our own uh retail development team >> and we have professionals I mean who for example retail head is from IBA and uh he did work in the largest oil marketing company and two other companies. So we have scanned already 100 sites potential sites >> and even yesterday I visited a site at the Lee market over here. So we have been you know scanning potential locations so that which sites suits to us and out of that there are 12 sites the process is uh that those are under process already. So this is a continuous process of you know retail development.

[00:05:07]Okay.

[00:05:07]>> I think financial risks be associated 100 sites plan. How do you expect financial risk involved?

[00:05:21]We are the fuel station management company and also we are logistic company. I mean we have least risk because the dealer's margin even is going to I was working in a largest oil marketing company where the dealers margin was 1 rupees and 20 pesa. So over the years it has gone eight times. Okay.

[00:05:42]So definitely even government is uh uh you know uh uh understanding that to run the business you need to you know so they they are they are increasing time to time that one and the other one since we are linked with go uh and Aramco's aggressive growth so we we we have uh you know uh least risk in that terms but definitely since we do a lot of uh B2B business you know carpet business for example we we are the supplier of fuel to deu so carrying cost you know if the prices go very high so then we we can you know uh need some more money and for that we have unutilized you know even lines from the different banks so we we can adjust it's a very interesting company logistics largest fuel marketing company and now there's a growth plan towards go to towards OMC to a rising question which circles manage while being a dealership as well as an OMC going forward.

[00:07:07]>> Well, I mean currently if you see our near, you know, future objectives and the numbers also projected numbers, we want to consolidate ourself toward the this tankaris logistic business as well as increasing our retail out network >> which will be branded by go and aramco.

[00:07:30]And then this storage one because there is a place we have a land in Gi and Gi is the area where there is a gap.

[00:07:39]>> Mhm.

[00:07:40]>> And over here also there are so many big you know storage uh houses which are renting out their storage to different oil marketing companies. Even one oil marketing company gives the hospitality to the others at different locations. So our model current model is enough to give us a good profit even in near term if we don't have the OMC IPOs 4.8 billion 58% has to go towards your storage capacity behind all of this 58% being invested on the storage capacity and how do you plan to use your IPO proceeds on your business? Yeah, I mean uh I think this is the right sort of uh question which you ask about the uh major portion going into storage >> because as I said there is a gap >> there is opportunity for us to give that you know utilize that storage on rental and the payback is also in four years time. So this is a still very profitable business for us that is somewhere around 3.96% are you pricing for a risk. Yeah.

[00:09:28]Basically, you're leaving money on the table for your retail investors.

[00:09:32]>> No, I mean this is our first IPO for the for the group. I mean and uh also interestingly our performance recent performance is even better than the planned one. So one of the reason for I mean it looks even less although it was definitely much more discounted one >> at the same time our performance recent performance has gone better and we are still happy that you know at least our you know those investors will also make money out of it there's a digitization standoff recently margins.

[00:10:22]How do you plan to development progress? I think we said I mean future may if we see definitely digitization is going to help to the industry also and uh it's going to even for the government uh you know for the policy making it is going to uh you know those uh numbers are going to uh you know sort of facilitate everyone to do better and government has already planned to raise even the as you rightly said the distribution margin and that will translate Even a bigger profit for us because we are fuel station management company.

[00:11:04]>> So dealer margin will be increased.

[00:11:06]>> Absolutely.

[00:11:08]Global oil prices in light of what is happening geopolitically.

[00:11:23]uh since we are fuel station management company and we have a inventory from 3 days to 8 days. So we definitely don't want to run our site dry. We want we want that every customer who enters to our fuel station gets fuel. Okay. But at the same time we definitely can manage the inventory level in a in a in a decent way so that we don't get you know uh those uh flood losses.

[00:11:57]If you OMC definitely it is uh more sort of uh chances that you you go into that fluctuation business model already. different modes of operating the business. Recent investment in the EV space as well.

[00:12:29]Is this a strategic hedge against a traditional petroleum mechanism?

[00:12:37]destruction.

[00:12:39]I mean overall in the energy sector.

[00:13:00]Although long 2040 onward but even then we we are taking that change or 600 million And definitely another we have committed total 1.5 billion in our 5 years business plan or cap house is interesting the group which which capital smart motors which to me looks very interesting for example key,000 cc level equivalent if you get in 5 million rupees you EV that's going to be a gamecher plus diversify organization highend be midn or lowend be products so I mean this is a quite interesting portfolio supplementary question on one side there's an expansion to more than 100 sites in terms of the petroleum supply investment 610 million and 1.5 billion into charging stations.

[00:14:36]Now every station need to have charging station but already stations. We start working on that.

[00:14:48]ations with no investment from your side.

[00:14:53]They're offering on profit sharing you know that they can install or interesting model or future future maybe in karach near in future recovery vehicles so that when your car is stuck battery and then in 10 minutes that is 30% discharge and you go to your office and you go to your home I mean we are already taking these uh initiatives.

[00:15:24]industry fuel indry petroleum competition going forward. What is your vision? What have you planned out market share capture while ensuring the profitability at the same time?

[00:15:41]>> Yeah.

[00:15:44]study from a business school or what a customer looks into while fueling the car.

[00:15:55]Prominent one was easily you can enter to the fuel station. So your access is very important. Thenity quantity customer service and then convenience store facilities you would love to you know be there. We are focusing in all those three four matters in site which is the largest convenience store.

[00:16:34]you know it is a 400 ft front uh station. So you you are creating a war experience for the customer. So you have to differentiate >> irrespective of the competition. If you're doing something great and different than the others in a positive way you achieve yourselves.

[00:16:52]>> Okay.

[00:16:55]overall industry at the moment. If you could talk about what major challenges does is the industry going through at the moment if you have any suggestions.

[00:17:09]I think for the for the industry I mean definitely the price volatility the price >> and then the carrying cost I mean for example if you need to have the inventory you need to have so maybe I mean if there is and the price you know fluctuation determination weekly or bi-weekly uh may maybe there is some sort of you know I mean consistent price related for example dealers margin so that dealers are happy OMC and then we we can minimize the impact on both you know dealers as well as OMC on the price fluctuation >> and availability you know of that the same question IPO the IPO subscription opens on the 11th of May for the public retail investor in in the PSX in one sentence if I were to ask you what message do you have for them? Uh I would definitely say to up sub investors go let us you know earn joining us because we have already established that planned profitability say be we have exceeded revenue exceed 120 billion rupees say 150 billion and then also profit from 3.2 2 billion to we are crossing 5 billion. So let us you know join hand in this great success.

[00:18:47]>> Thank you for being with us today.

[00:18:49]>> You're most welcome. Thank you so much.