Press Release
VIS Reaffirms Instrument Ratings of Al-Karam Textile Mills (Private) Limited’s Sukuk
Karachi, December 01, 2025: VIS has reaffirmed the instrument ratings of Al-Karam Textile Mills’s (AKTM) Medium Term Sukuk (MTS) at ‘A’ (Single A). Medium term rating of A reflects good credit quality; Protection factors are adequate. Risk factors may vary with possible changes in the economy. Entity ratings of AKTM stands at ‘A/A2’ (Single A/ A-Two). Outlook on the assigned rating is “Stable”. Previous final rating action for the Sukuk was announced on August 27, 2024.
Al-Karam Textile Mills (Private) Limited (AKTM), part of Al-Karam Group, is a vertically integrated textile setup with nearly four decades of operational history. In addition to core textile operations, the Group has strategic investments in salt production and trading, and has more recently diversified into fish and agriculture farming. Its product portfolio includes a range of yarns (from coarse to fine counts), fabrics, home textiles, institutional textiles, and garments. The Company has a global footprint, with showrooms and design offices in the US, UK, France, and Portugal.
AKTM issued a secured, privately placed Sukuk of Rs. 2.2 billion on August 15, 2024, primarily to finance working capital requirements for its newly established Nooriabad spinning plant. The instrument has a three-year tenor, with the first redemption due three months after the initial drawdown. Pricing is linked to 3M KIBOR + 1.50%, and the Sukuk is secured via a mortgage through deposit of title deeds over the mortgaged property in favor of the Investment Agent. The structure remains intact, supporting the reaffirmation of the Sukuk rating.
The rating reflects AKTM’s strong industry standing, fully integrated production facilities, and consistent operational performance, underpinned by a diversified product portfolio and longstanding customer relationships. It is supported by the backing of Al-Karam Group and steady sales traction across both export and domestic markets. The newly established Nooriabad spinning plant is expected to contribute to revenue growth and support profitability over the medium term.
While reliance on short-term borrowings remains high, the equity base provides adequate support, and gearing is projected to improve as short-term debt levels moderate. Liquidity and debt-coverage indicators remain satisfactory, with recurring cash flows from Nooriabad operations contributing to overall financial stability.
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/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf