Press Release
VIS Finalizes Short-Term Rating to Short Term Sukuk of Engro Fertilizers Limited
Karachi, January 21, 2026: VIS Credit Rating Company Limited (VIS) has finalized short term rating of ‘A1+’ (A one plus) to the Short-Term Sukuk (STS) of PKR 20 billion of Engro Fertilizers Limited (‘EFert’ or the ‘Company’). The short-term rating of ‘A1+’ indicates strongest likelihood of timely repayment of short-term obligations with outstanding liquidity factors. Previous rating action was announced on November 07, 2025.
Engro Fertilizers Limited, a key subsidiary of Engro Corporation, is one of Pakistan’s leading fertilizer producers. Incorporated in 2009 and listed on the Pakistan Stock Exchange, the Company maintains a strong nationwide commercial presence. EFert manufactures and markets urea, NPK complex fertilizers, phosphate-based products (DAP, MAP), and zinc-based fertilizers. Its operations include two urea plants at Daharki—Daharki Base and EnVen—with a combined capacity of 2.25 million tons per annum, as well as an NPK plant at Port Qasim with 100,000 tons annual capacity. DAP needs are met through imports.
The Company has issued a rated, unsecured, privately placed Short-Term Sukuk (STS) of PKR 20 billion, including a green-shoe option of PKR 5 billion, with a tenor of six months from the issue date. This issuance is a rollover of an existing PKR 20 billion STS Sukuk, which matured on November 14, 2025. The proceeds of the STS were directed towards meeting the Company’s working capital requirements, particularly to support inventory. The profit rate is 3M KIBOR minus 0.15%, with both profit and principal payable in a single bullet payment at maturity.
The assigned rating reflects EFert’s resilient business fundamentals, strong sponsor support from the Engro Group, and a consistent track record of strong cash flow generation. The fertilizer sector remains strategically important, given its central role in sustaining crop yields. The proposed short-term sukuk (STS) is a rollover of an existing facility and is primarily aimed at meeting higher working capital needs. These inventories reflect slower urea offtake and muted DAP sales in recent quarters, which have contributed to higher leverage. Management expects this to improve over the coming quarters as product offtake strengthens and inventory normalizes. Rating draws comfort from EFert’s strong cash flow history which provides buffer against near -term pressures and help contain rollover risk, supported further by the Company’s strong banking relationships and established market position. However, timely offtake recovery and disciplined working capital management will remain important to sustain short-term credit metrics.
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
Instrument Rating
https://docs.vis.com.pk/Methodologies-2025/IRM-Apr-25.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf