Press Release
VIS Assigns Preliminary Rating to Proposed Short Term Sukuk-4 (STS-4) of Citi Pharma Limited
Karachi, June 19, 2026: VIS Credit Rating Company Limited (VIS) has assigned a preliminary rating of ‘A1(plim)’ (A one preliminary) to the Short Term Sukuk-4 (STS-4) 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.
The proposed STS-4, amounting to PKR 1,500 million (inclusive of a Green Shoe Option of PKR 500 million), will be privately placed and unsecured. The proceeds will be utilized to meet the Company’s working capital requirements. The instrument will have a tenor of six (06) months and carry a profit rate of KIBOR plus 60–100 bps per annum. Both profit and principal will be repaid through a single bullet payment at maturity.
The rating is supported by Citi Pharma Limited’s strong positioning in the API segment of Pakistan’s pharmaceutical sector, which carries relatively low business risk due to stable demand and limited sensitivity to economic cycles. Sustained demand for locally manufactured APIs underscores the strategic importance of domestic production, further reinforced by supportive government policies aimed at import substitution. High entry barriers arising from stringent regulatory requirements, compliance standards, and significant capital intensity limit competitive pressures and contribute to industry stability.
The rating also reflects steady revenue growth and improving margin profile, driven by the Company’s gradual diversification into higher-margin formulation products through proprietary brands and institutional sales, alongside expansion in nutraceutical exports. Strategic collaborations with international partners, including Murli Krishna Pharma (India) and Hangzhou Newsea Technology Co. Ltd (China), are expected to enhance operational efficiency through technology transfer and automation, while also supporting medium-term international expansion.
While client and product concentration remain key considerations, management initiatives aimed at broadening the customer base and diversifying the product portfolio are expected to mitigate these risks over time. CPHL maintains a sound profitability profile, supported by topline growth and margin expansion. However, maintaining a balanced capital structure and ensuring alignment of gearing and leverage with growth and cash flow generation capacity will remain important going forward. The assigned rating further incorporates the intended use of STS-4 proceeds toward working capital support and retirement of the previously issued short-term sukuk, with continued maintenance of a comfortable liquidity profile remaining a key rating consideration.
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