Press Release
VIS Reaffirms Instrument Rating of Sukuk 2 Issue of OBS Pakistan (Private) Limited
Karachi, December 08, 2025: VIS Credit Rating Company Limited (VIS) has reaffirmed the instrument rating of ‘Sukuk 2’ issue of OBS Pakistan (Private) Limited (‘OBS Pakistan’ 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 November 05, 2024. The entity rating of OBS Pakistan is ‘A/A2’ (‘Single A/A Two’) with a ‘Stable’ outlook.
The Sukuk, issued in February 2024, amounts to Rs. 2.9 bn and features a 7-year tenor with an 18-month grace period. It carries a profit rate of 3M KIBOR plus a 1.60% spread, with principal payments scheduled over 22 quarters. Profit payments are made quarterly and on time, with the most recent payment completed in August 2024. The security structure includes a mortgage/hypothecation charge on AGP's fixed assets, a corporate guarantee from AGP, and a designated collection account for revenue receipts. The Financing Payment Account (FPA) will be replenished two working days prior to each installment due date.
The rating reflects OBS Pakistan’s established presence in the domestic pharmaceutical market and the strategic and financial backing of its parent, AGP Limited (rated ‘A+’). AGP’s strong market position and the corporate guarantee on OBS Pakistan’s debt provide meaningful comfort. Rating also incorporate Medium-to-Low business-risk profile of the pharma sector, supported by steady demand and low cyclicality; however, regulatory unpredictability and exposure to imported raw materials continue to pose challenges. The Company’s revenue base remains concentrated in a few flagship brands, though their entrenched market positions and management’s initiatives to expand the portfolio within existing therapeutic segments help mitigate concentration risk. Profitability improved during the year on the back of operational efficiencies from local manufacturing, better supply-chain management, and lower finance costs amid a more accommodating interest-rate environment. Capitalization has strengthened through earnings retention, while routine debt repayments have contributed to gradual deleveraging. Liquidity metrics remain subdued due to current liabilities following the debt-financed acquisition; however, the parent’s committed working-capital support provides comfort. Going forward, ratings will remain underpinned in continued enhancement of capitalization through further debt reduction and equity build-up, alongside the maintenance of prudent liquidity management.
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