Press Release

VIS Reaffirms Entity Ratings of Foundation Securities (Pvt) Limited

Karachi, April 10, 2024: VIS Credit Rating Company Limited (‘VIS’) has reaffirmed entity ratings of Foundation Securities (Pvt) Limited (‘FSL’ or ‘the Company’) at A/A2 (‘Single A/A Two’). Long-term rating of ‘A’ reflects good credit quality, with adequate protection factors. Risk might fluctuate depending on the state of the economy. Short-term rating of ‘A2’ signifies good likelihood of timely repayment of short-term obligations, with sound short-term liquidity factors. Outlook on the assigned ratings is ‘Stable’. Previous rating action was announced on January 29, 2024.

FSL offers equity brokerage services with a limited presence in commodity segment and caters to domestic retail and institutions, high net worth individuals, and foreign broker dealers. Headquartered in Karachi, there are a total of 4 branches located in Lahore, Rawalpindi, and Islamabad. FSL is registered with Securities & Exchange Commission of Pakistan (‘SECP’) and holds a Trading and Self-Clearing (‘TSC’) license and Trading Rights Entitlement Certificate (‘TREC’) granted by Pakistan Stock Exchange Limited (‘PSX’) and license of Pakistan Commodity Exchange (‘PMEX’).

Assigned ratings continue to derive strength from the strong profile of sponsors, with majority shareholding held by Askari Bank Limited (AKBL), followed by the Fauji Foundation Group. AKBL is rated AA+/A1+, while Fauji Foundation is one of Pakistan’s biggest conglomerates, boasting a diversified presence across various business sectors and substantial financial strength. Support from sponsors encompass financial support to FSL.

Assigned ratings also incorporate the financial profile of the Company. During CY24, the Company’s operating revenue exhibited a strong growth, primarily driven by a significant increase in the brokerage revenue, in tandem with an industry wide surge in trading volumes, with brokerage income dominating the revenue mix. Consequently, operational efficiency of the Company recorded improvement and profitability registered a sizeable increase. Liquidity profile of the Company is considered adequate while market risk is minimal, given no involvement in proprietary trading. Capitalization profile of the Company is supported by minimal debt levels and a sizeable equity base. While the Company's leverage ratio is elevated, it remains at adequate levels after adjusting for customer assets held with banks. Going forward, continued increase in the revenue and profitability profile along with improvement in liquidity profile as well as maintenance of market risk and capitalization profile will remain important for the ratings.

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


Applicable Rating Criteria: Securities Firms:
https://docs.vis.com.pk/Methodologies-2025/SecuritiesFirms.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 .