Press Release
VIS Reaffirms Instrument Rating of Sukuk 1 Issue of OBS AGP (Private) Limited
Karachi, December 08, 2025: VIS Credit Rating Company Limited (VIS) has reaffirmed the instrument rating of ‘Sukuk 1’ issue of OBS AGP (Private) Limited (‘OBS AGP’ or the ‘Company’) at ‘A+’ (‘Single A Plus’). Long term rating of ‘A+’ indicates good credit quality; protection factors are adequate. Risk factors may vary with possible changes in the economy. Outlook on the assigned ratings remains ‘Stable.’ Previous rating action was announced on October 31, 2024. The entity rating of OBS AGP is ‘A/A1’ (‘Single A/A One’) with a ‘Stable’ outlook.
The Sukuk, issued in October 2021, amounts to Rs. 2.6 bn with a 5-year tenor and a 1-year grace period, featuring a profit rate of 3M KIBOR plus a 1.55% spread. Principal payments are scheduled over 16 quarters, commencing 15 months from the issue date, with quarterly profit payments. The most recent payment, including both profit and principal, was completed in October 2025. The security structure includes a pari-passu charge on AGP’s fixed assets valued at PKR 2.6 bn (inclusive of a 20% margin), a share pledge by AGP’s major shareholder amounting to PKR 1.4 bn (inclusive of a 53.57% margin), and a corporate guarantee from AGP covering the full principal amount. Additionally, a rental payment reserve account will maintain one upcoming rental payment at all times.
The ratings reflect OBS/AGP Group’s established position as one of Pakistan’s leading healthcare conglomerates, supported by a strong local footprint and an expanding regional presence. The pharmaceutical sector’s business risk profile remains Medium to Low, anchored by stable demand and low cyclicality, although regulatory uncertainty and volatility in imported input costs continue to present challenges. OBS AGP product mix remains concentrated; however, flagship brands such as Azomax and Zatofen maintain strong market shares within their therapeutic classes, partially mitigating concentration risk. Profitability improved during the year, driven by higher sales volumes, favorable pricing dynamics, and lower finance costs amid a more accommodative interest-rate environment. Capitalization strengthened through earnings retention and debt reduction, resulting in improved gearing and leverage indicators. Liquidity, while constrained by elevated current liabilities following the debt-financed acquisition, is supported by available unutilized working-capital facilities and backing from the parent company. Operational improvements have contributed to better cash-flow generation and stronger coverage metrics. Looking ahead, the ratings remain supported by sustained profitability, continued equity accretion, manageable leverage, and expectations of a gradual easing in liquidity metrics as acquisition-related obligations decrease.
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