Press Release
VIS Assigns Preliminary Rating to Proposed Short Term Sukuk-3 of Engro Fertilizers Limited
Karachi, May 13, 2026: VIS Credit Rating Company Limited (VIS) has assigned a preliminary rating of ‘A1+(plim)’ (A one plus preliminary) to the proposed Short-Term Sukuk (STS-3) of PKR 25 billion of Engro Fertilizers Limited (‘EFert’ or the ‘Company’). The short-term rating of ‘A1+(plim)’ indicates strongest likelihood of timely repayment of short-term obligations with outstanding liquidity factors. The rating will be finalized upon receipt and review of the final documents for the Sukuk.
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.
Engro Fertilizers Limited plans to issue a rated, unsecured, privately placed Short-Term Sukuk (STS)-3 of up to PKR 25 billion, including a green-shoe option of PKR 10 billion, with a tenor of six months from the issue date. Proceeds of the STS are to be directed towards meeting the Company’s working capital requirements, particularly to support inventory. The proposed profit rate is 1M - KIBOR minus 0.20%. Both profit and principal are payable in a single bullet payment at maturity. The Company issued Sukuk-2 amounting to PKR 20 billion in November 2025, which is scheduled to mature on May 18, 2026, and will subsequently be replaced by Sukuk-3.
The assigned rating of the proposed Short-Term Sukuk reflects Engro Fertilizers Limited strong business fundamentals, sponsorship support from the broader Engro Corporation, and the Company’s demonstrated track record of healthy cash flow generation. The fertilizer sector continues to hold strategic importance due to its critical role in supporting agricultural productivity and food security in Pakistan. The rating further draws comfort from EFert’s healthy liquidity profile, established market position, and strong banking relationships, which collectively support refinancing flexibility and contain short-term liquidity risk. The Company’s consistent cash flow generation provides adequate support for timely servicing of short-term obligations. Going forward, sustained product offtakes, efficient inventory management, and disciplined working capital management will remain important to maintaining the Company’s short-term credit profile.
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