Press Release

VIS Credit Rating Company Assigns Negative Outlook to the Sukuk Rating (Sukuk-1) of Agha Steel Industries Limited

Karachi, December 13, 2022: VIS Credit Rating Company Limited (VIS) has maintained the Sukuk ratings (Sukuk-1) of Agha Steel Industries Limited (ASIL) at ‘A+’ (Single A Plus). Outlook on the assigned rating has been revised from ‘Stable’ to ‘Negative’. Long Term rating of A+ for the instrument reflects good credit quality, adequate protection factors. Risk factors may vary with possible changes in the economy. Previous rating action was announced on March 01, 2022.

Agha Steel Industries Limited (ASIL) is classified amongst the top-tier players in the long steel sector with installed capacity of billets and reinforcement bars (rebars) at 450,000 MTs and 250,000 MTs, respectively. The expansion plan of bars to 650,000 MT is currently under progress with COD expected in June’23.

Revision in rating outlook is reflective of weakening in debt servicing ability due to subdued demand dynamics in the local industry arising as a result of inflationary pressures. Ratings also take into account the business risk of the long steel sector, which is considered relatively high because of the sensitivity to changes in exchange rate, and volatile nature of raw material prices. However, risk profile and weak demand is supported to an extent by technological competitive edge of the Company.

Assessment of financial risk profile incorporates low revenue base in the ongoing year and high financial expenses narrowing net margins of the company. Consequently, cash flow coverages of the Company reduced bringing the liquidity profile under stress with debt service coverage ratio reported at lower than one at end-Sep’22. Given the weak economic outlook meeting projected profitability and liquidity indicators at levels that commensurate with the assigned ratings is considered important.

For further information on this rating announcement, please contact Ms. Asfia Aziz (Ext: 212) or the undersigned (Ext: 201) at 021-35311861-71 or email at

Sara Ahmed

Applicable Rating Criteria: Industrial Corporates (August 2021)
CorporateMethodology202108.pdf (

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