Press Release

VIS Maintains Entity Ratings of Cyan Limited

Karachi, November 14, 2022: VIS Credit Rating Company Limited (VIS) has maintained the entity ratings of Cyan Limited (CL) at ‘A/A-1’ (Single A/A-One). Medium to long-term rating of ‘A’ denotes good credit quality, adequate protection factors and risk factors may vary with possible changes in the economy. Outlook on the assigned rating has been revised from ‘Stable’ to ‘Negative’. Previous rating action was announced on November 11, 2021.

CL is principally engaged in investment in public equities market, with an objective to pursue active returns. Assigned ratings incorporate sponsor support being a part of Dawood Hercules Group (DHG) that has presence in multiple sectors including fertilizer, PVC, food, power generation, coal mining, LNG storage and private investments. Furthermore, internal consolidation of resources and Board Investment Committee of CL and Dawood Hercules Corporation Limited may improve overall efficiency of the company.

Revision in rating outlook is reflective of weakening in financial risk profile as evident by declining profit levels, and erosion in equity base due to losses incurred in the ongoing year and high dividend payout in the outgoing year. Ratings incorporate heightened market risk emanating from high concentration at both, sector and scrip levels. However, projected change in investment strategy where a major portion of equity portfolio will encompass dividend yielding scrips provides some comfort to market risk assessment.

Profitability indicators of the company trended downwards in the review period due to unrealized losses on the investment portfolio amidst dismal performance of the KSE-100 index. As a result, efficiency ratio of the company also deteriorated over time. The assigned rating is constrained by the lack of revenue stream diversification, as earning profile of the company is largely dependent on equity market investments. Going forward, in view of current macroeconomic environment, VIS expects quantum of dividend income to remain subdued. However, liquidity profile of the Company remains fairly strong.

Assessment of financial profile reflects elevated leverage levels because of higher quantum of debt levels and lower equity base. In view of the current macroeconomic environment, the company plans to reduce financial risk through deleveraging of its balance sheet thereby declining overall quantum of exposure in the equity market. Materialization of deleveraging plans while sustaining profitability of the Company will be key rating sensitivities amidst high market risk environment.

For further information on this rating announcement, please contact Ms. Asfia Aziz or the undersigned (Ext. 201) at 021-35311861-70 or email at

Javed Callea

Applicable Rating Criteria: Non-Bank Financial Companies (March 2020)

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