Press Release
VIS Finalizes Rating of Short Term Sukuk (STS) of Ittehad Chemicals Limited
Karachi, July 22, 2026: VIS Credit Rating Company Limited (VIS) has finalized the short-term rating Ittehad Chemicals Limited’s (‘ICL’ or ‘the Company’) Short Term Sukuk (STS) at ‘A1’ (A One). Short term rating of ‘A1’ reflects strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. Previous rating action was announced on June 09, 2026. The entity ratings of ICL stand at ‘A/A1’ (Single A/A One).
ICL raised a privately placed, unsecured Short-Term Sukuk (‘STS’, ‘the issue’ or ‘the instrument’) amounting to Rs. 1,500m on July 20, 2026, to fund its working capital requirements. The issue includes a Green Shoe option of Rs. 500 million. The instrument has tenure of up to 6 months from date of drawdown date, with profit paid quarterly and redemption in bullet at maturity, while the profit rate is benchmarked at 3 Month KIBOR minus 0.25% per annum. Allied Bank Limited has been mandated as the Lead Arranger for the issue and Pak Kuwait Investment Company Limited is the Investment Agent. The assigned rating reflects ICL’s established presence in the chemical sector and adequate financial risk profile. Key credit support stems from the Company’s diversified chlor-alkali and downstream product portfolio, sustained local demand, and ongoing initiatives to improve value addition and operating efficiency, including the flaker plant and biomass-based power project. While profitability margins remained under pressure due to elevated raw material, utility, and salary costs, net profit was largely sustained on the back of higher sales and lower finance costs. Cash flows and debt servicing coverage remained sound. Liquidity indicators improved by end-9MFY26, supported by higher cash balances, reduction in short-term borrowings, and adequate coverage of short-term debt through stock-in-trade and trade debts. Going forward, profitability is expected to benefit from new product additions, export growth, and anticipated energy cost savings following commissioning of the biomass-based power plant. The rating remains dependent on ICL’s ability to sustain liquidity buffers and ensure timely repayment of profit and principal at maturity.
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
Instrument Rating:
https://docs.vis.com.pk/Methodologies-2025/IRM-Apr-25.pdf