Press Release
VIS Assigns Preliminary Rating to Proposed Short Term Sukuk-2 (STS-2) of Citi Pharma Limited
Karachi, July 21, 2025: VIS Credit Rating Company Limited (VIS) has assigned a preliminary rating of ‘A1(plim)’ (A one preliminary) to the Short Term Sukuk-2 issue of PKR 1,500 million of Citi Pharma Limited (‘CPHL’ or the ‘Company’). The short-term rating of ‘A1(plim)’ indicates strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. The entity rating of CPHL is ‘A/A1’ (‘Single A/A One’) with a ‘Stable’ outlook.
CPHL was established on October 8, 2012, and began its journey in the pharmaceutical sector following the acquisition of Askari Pharmaceuticals (Private) Limited (APPL) from the Army Welfare Trust in 2013. This strategic acquisition enabled CPHL to inherit APPL's operations, focusing on the production and distribution of Active Pharmaceutical Ingredients (APIs) and formulation drugs. Transitioning into a public unlisted company in October 2020, CPHL achieved a significant milestone by listing on the Pakistan Stock Exchange on July 9, 2021. Today, it stands as a key player in Pakistan’s pharmaceutical industry, renowned for producing high-quality APIs like Paracetamol. The Company operates across two core segments—APIs and pharmaceutical formulations—supporting the production of Finished Pharmaceutical Products (FPPs) by combining APIs with other essential compounds.
The proposed short-term instrument will be structured on the basis of Musharakah (Shirkat-ul-Aqd). The Sukuk, amounting to PKR 1,500 million, will be rated, privately placed, and unsecured. It is being issued to meet the Company’s working capital requirements and to retire the previously issued Sukuk. The instrument will have a tenor of six (06) months, carrying a profit rate of 3-month KIBOR plus 50–80 bps per annum. Profit will be payable quarterly on the outstanding principal amount, while the principal will be repaid in a single bullet payment at maturity.
The rating draws support from CPHL’s presence in the API segment of the pharmaceutical sector, which carries a low business risk underpinned by stable demand and low economic sensitivity. Strong demand for locally produced APIs highlights the strategic importance of domestic production, further supported by government policies designed to promote local API manufacturing. High entry barriers—stemming from strict compliance standards, regulatory approval processes, and substantial capital requirements—contain competition and further support industry stability. The rating also reflects CPHL’s revenue growth and improving margins, supported by diversification into high-margin formulations through proprietary brands and institutional sales, while also expanding into nutraceutical exports. Strategic partnerships with global firms such as Murli Krishna Pharma (India) and Hangzhou Newsea Technology Co. Ltd (China) are expected to enhance production efficiency through automation and support international expansion plans.
Efforts to mitigate client and product concentration risks through portfolio diversification are underway. The Company maintains a sound liquidity and profitability profile, with a strategic focus on meeting the pharmaceutical industry's evolving demands. Rating remains underpinned on maintenance of liquidity profile, including availability of adequate short-term credit lines.
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