Press Release
VIS Assigns Preliminary Ratings to Aspin Pharma Private Limited’s Short Term Sukuk - 2
Karachi, June 23, 2025: VIS Credit Rating Company Limited (‘VIS’) has assigned preliminary instrument ratings of A1 (plim) (A One Preliminary) to Aspin Pharma Private Limited’s (“APPL” or “the Company”) Short Term Sukuk – 2 (STS-2). The short-term ratings of A1 indicates Strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. The instrument rating is in line with short-term entity rating of the Company of A1.
The instrument is a privately placed, unlisted, and unsecured Short-Term Sukuk (STS) based on Musharakah (Shirkat-ul-Aqd), with a total issue size of PKR 2,250 million, including a PKR 500 million Green Shoe Option. The purpose of the Sukuk is to support the working capital needs of the Company. The instrument has a tenor of six (06) months, starting from the disbursement. Profit rate on the instrument is Six Month KIBOR+1.00%. Profit will be payable at the time of the maturity of the Sukuk along with the principal payment. The Issue Agent for this issue is The Bank of Punjab (“BOP”). The company may rollover/refinance the proposed STS 2 by way of new issue earlier than the maturity of proposed STS-2, if needed.
Assigned ratings incorporate the business risk profile of Pakistan’s pharmaceutical sector, which is assessed in the low to medium risk category. The sector benefits from the essential nature of its products, which ensures demand stability irrespective of macroeconomic cycles. Medicine consumption is supported by demographic trends and public health needs. While competition exists due to low entry barriers for generic producers, market concentration among top-tier players provides adequate insulation. Recent deregulation for non-essential drugs and reductions in import duties have eased some pressure on profit margins. The sector’s dependence on foreign R&D based products and low local innovation limits technology risk, and capital investment needs are typically managed through internal sources or market instruments. Energy-related risks are considered minimal, with mitigation mechanisms in place. The outlook for the sector remains stable, driven by sustained domestic demand and partial regulatory reforms.
Assigned ratings also take into account the financial risk profile of the Company. Profitability remains linked to competitive pricing dynamics Revenue growth has been supported by price adjustments allowed under the deregulated pricing regime. Gross margins have remained within a consistent range, reflecting stable earnings from a mix of products. Capitalization has historically remained conservative, though recent expansion-related expenditures have increased the reliance on short-term funding. Working capital requirements are currently being met through short-term facilities and instruments, while long-term financing is being explored to manage upcoming capital needs and ease existing pressures. Liquidity has depicted strain due to capital expenditure being met largely through internal cash resources and short-term borrowings, resulting in an asset-liability mismatch. However, coverage indicators remain supported by strong margins and limited debt exposure. Going forward, ratings will remain sensitive restoration of liquidity to levels commensurate with assigned ratings.
For further information on this ratings announcement, please contact on 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria:
Corporate Rating
https://docs.vis.com.pk/docs /CorporateMethodology.pdf
Instrument Rating
https://backupsqlvis.s3.us-west-2.amazonaws.com/Methodologies-2025/IRM-Apr-25.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf