Press Release
VIS Assigns Preliminary Rating to Proposed Sukuk-1 of Sadaqat Limited
Karachi, July 3, 2026: VIS Credit Rating Company Limited (VIS) has assigned preliminary rating of ‘A+’ (A Plus) to Sadaqat Limited’s (‘SL’ or ‘the Company’) Sukuk-1. Outlook on the assigned rating is ‘Stable’. The medium to long-term rating of ‘A+’ reflects good credit quality; Protection factors are adequate. Risk factors may vary with possible changes in the economy. Rating to be finalized on review of executed documents. The entity ratings of SL stand at ‘A/A2’ (Single A/A Two).
SL is a vertically integrated textile manufacturer incorporated in 1987. The Company’s operations span spinning, weaving, knitting, processing, stitching, and exports of value-added garments and home textiles. Its head office and production facilities are based in Faisalabad. The rating takes into account the experience of sponsors and well-established footprint of the Company in the textile sector amidst elevated business risk for textile exporters due to declining domestic cotton availability, reliance on imported raw material, high energy costs, and policy inconsistencies affecting yarn demand, alongside pressures from global tariffs. The Company has shown resilience amidst these pressures as it completed vertical integration and enabling a shift toward higher-margin products. Gearing, coverage ratios and liquidity indicators modestly improved in FY25 and remained largely stable in 1HFY26.
Assigned rating reflects the security structure of the Sukuk-1, supported by first pari passu charge over all present and future fixed assets (including land & building) and current assets with 25% margins, along with lien and set-off rights over key project accounts. A structured payment mechanism is in place where 10% of revenues are routed through a Collection Account (CA), which funds the Finance Payment Account (FPA) to ensure timely servicing of quarterly profit and principal obligations. The FPA will be built through monthly deposits of one-third of upcoming installments. Any shortfalls will be covered by the issue or sponsors, who provide an irrevocable undertaking to support the funding needs. The rating remains contingent on the Company’s disciplined financial management to meet prescribed undertakings during the Sukuk-1 tenure, as well as expected profitability and cash flow generation for timely repayment of the instrument dues.
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