Press Release
VIS Reaffirms Instrument Ratings of Mughal Iron & Steel Industries Limited’s Sukuk I
Karachi, January 23, 2026: VIS Credit Rating Company Limited reaffirms instrument ratings of Mughal Iron & Steel Industries Limited’s Sukuk I issue at 'A+' (Single A Plus) with a 'Stable' outlook. Medium to long term rating of 'A+' indicates good credit quality; protection factors are adequate. Risk factors may vary with possible changes in the economy. Previous Rating action was announced on November 18, 2024.
Mughal Iron & Steel Industries Limited (“MISIL” or “the Company”) was incorporated in Pakistan on February 16, 2010, as a public limited company. The Company operates across both ferrous and non-ferrous segments, with its core business centered on the manufacturing and sale of mild steel products. MISIL’s manufacturing and warehousing facilities are located on Sheikhupura Road, Lahore, while its sales centers operate from Badami Bagh, Lahore. The Company’s only investment is in its subsidiary, Mughal Energy Limited (“MEL”), which is nearing completion of a 36.50 MW hybrid captive power plant intended to supply electricity to MISIL’s operations.
MISIL has issued rated, listed, secured and privately placed long-term Sukuk of amounting to Rs. 3bln. Tenor of the Sukuk is 5 years including 1-year grace period. The instrument will be redeemed in 16 equal quarterly payments starting from 15th month from the date of issuance. Besides conventional security structure, a debt payment account (DPA) is maintained with the agent bank which is build up with one third of the installment (principal plus profit) by the 25th day of each month such that the entire upcoming installment is deposited in the DPA by the 15th day of 3rd month.
The assigned ratings reflect Mughal Iron and Steel Industries Limited’s established position in Pakistan’s steel sector, supported by its operating track record and a diversified product portfolio spanning ferrous and non-ferrous steel products. The ratings incorporate the Company’s stable business profile, long-standing relationships in domestic and export markets, and continued focus on operational efficiency. Integrated operations across key production stages support cost optimization, while ongoing investments in captive and sustainable energy initiatives are expected to lower power costs and support margins over the medium term.
The Company is exposed to high to medium business risks stemming from demand cyclicality, competitive intensity, and volatility in raw material prices. Nonetheless, MISIL’s market position, together with adequate liquidity, improving coverage indicators, and a gradually strengthening capital structure, provides support to the assigned ratings. Key rating sensitivities include the Company’s ability to sustain margin improvement, manage working capital efficiently, and maintain liquidity and coverage metrics in line with current levels.
For further information on this ratings announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria: Corporates:
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
VIS Issue Rating Criteria
https://docs.vis.com.pk/Methodologies-2025/IRM-Apr-25.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf