Press Release

VIS Finalizes Short Term Rating of Short-Term Sukuk X (STS-X) of Pakistan Telecommunication Company Limited (PTCL)

Karachi, March 11, 2025: VIS Credit Rating Company Limited (VIS) has finalized short-term rating of PTCL’s Short Term Sukuk X (STS-X) at ‘A1+’ (A one plus). The short-term rating of 'A1+' denotes the strongest likelihood of timely repayment of short-term obligations with outstanding liquidity factors. The outstanding entity ratings of PTCL are ‘AAA/A1+’ with a ‘Stable’ outlook. Previous rating action was announced on January 10, 2025.

Pakistan Telecommunication Company Limited (PTCL), originally a state-owned entity, was established as a public limited company on December 31, 1995, succeeding Pakistan Telecommunication Corporation (PTC) under the Pakistan Telecommunication (Re-organization) Act of 1996. PTCL is listed on the Pakistan Stock Exchange (PSX) and is headquartered in Islamabad. The company offers a comprehensive range of telecommunication services throughout Pakistan, including Azad Jammu and Kashmir and Gilgit Baltistan. PTCL's portfolio includes wholly owned subsidiaries such as Pak Telecom Mobile Limited (PTML) and U-Microfinance Bank Limited. Additionally, PTCL is currently in the process of acquiring Telenor Pakistan (Private) Limited.

PTCL has issued a rated, unsecured, privately placed Sukuk (STS-X) amounting to PKR 10 billion, structured in accordance with Shariah principles. The Sukuk was issued on January 10, 2025, with arrangements facilitated by a leading commercial bank. It has a maturity of up to six months, with the proceeds intended to finance the company’s working capital requirements. The STS-X carries a profit rate of 3-month KIBOR plus 0.05% basis points per annum.

The assigned ratings are underpinned by medium business risk profile of the telecom sector owing to the non-cyclical nature of the industry with low sensitivity to inflationary pressures on operations conducted. Moreover, business risk also factors in capital-intensive and highly regulated nature of the sector serving as natural high barrier to entry for new entrants.

The assigned ratings reflect PTCL’s market position as Pakistan’s leading Integrated Information Communication Technology (ICT) provider, boasting the largest fixed-line network with a market share exceeding 71%. The ratings also factor in the company’s robust sponsor profile, supported by a substantial 62% shareholding from the Government of Pakistan (GoP) and a 26% equity stake held by Etisalat Group of UAE, which also retains management control. Additionally, the ratings do also considerate the financial soundness and management expertise of the Etisalat Group, which holds credit ratings of AA- from S&P and Aa3 from Moody’s.

The ratings also reflect the sound financial risk profile of the Company, marked by positive momentum in revenues, sizable margins and profitability indicators, adequate liquidity profile, and adequate debt-service coverages.

For further information on this ratings announcement, please contact 021-35311861-64 or email at info@vis.com.pk.

Applicable Rating Criteria: Corporates:
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
Applicable Rating Criteria: Rating the Issue
https://docs.vis.com.pk/docs/Rating-the-Issue-Aug-2023.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2025 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .