Press Release

VIS Reaffirms Sukuk Ratings of Aspin Pharma (Pvt) Limited

Karachi, October 4, 2023: VIS Credit Ratings Company Ltd. (VIS) has reaffirmed Sukuk rating of ‘A’ (Single A) to the Sukuk issue of Aspin Pharma (Pvt) Limited’s (“APL” or “the Company”). Medium to long-term ratings of ‘A’ signifies good credit quality; Protection factors are adequate. Risk factors may vary with possible changes in the economy. Outlook on the assigned ratings is ‘Stable’. The previous rating action was announced on September 30, 2022.
APL was incorporated as a private limited company on 14 December 2013. The registered office of the Company is situated at Plot No.10 & 25, Sec-20, Korangi Industrial Area, Karachi. The Company is a wholly owned subsidiary of Aitkenstuart Pakistan (Private) Limited (parent company). Principal activities of the Company include import, marketing, export, dealership, distribution, wholesale and manufacturing of all kinds of medicines, drugs and pharmaceuticals.
APL had issued a Rs.1,500m Sukuk for refinancing a Rs.1,000m long-term loan and funding operations. The Sukuk was issued in Nov’17 with a six-year tenor including a one-year grace period. Repayment term included twenty equal quarterly installments, starting from the fifteenth month. The instrument is set to mature in end-Nov’23. Quarterly profit payment pricing was set at 3-Month KIBOR plus a 1.50% p.a. spread. The Sukuk was secured by a pari-passu charge on all current and future fixed assets, with a 15% margin over the issue size.
Ratings assigned to APL take into account long-standing presence of the group coupled with strong sponsor and financial support. Ratings also incorporate the business risk of the industry, characterized by non-cyclical demand dynamics; however, regulatory pricing constraint and exchange rate volatility pose a risk to the sector.
Ratings also consider sales growth on the back of volume and price increases, as well as margin challenges due to economic conditions and currency fluctuations evident in 1HCY23. The Company’s portfolio concentration risk remains a constraint, however, market positioning of leading products in their respective category provides comfort. Ratings also account for the Company's sound debt coverage and capitalization profile. The Company has shown consistent improvement in its coverage indicators, with healthy Funds from Operations (FFO) and a strengthened Debt Servicing Coverage Ratio (DSCR). Similarly, APL's liquidity position is underpinned on short cash conversion cycle, along with strong short-term borrowing coverage. Although the Company has recently reported higher inventory in response to currency depreciation, management expects minimal impact on overall liquidity due to steady product demand and inventory offtake. Maintenance of strong liquidity metrics in-line with assigned ratings will remain a key rating consideration going forward.
For further information on this ratings announcement, please contact Mr. Saeb Muhammad Jafri (Ext: 202) or the undersigned (Ext: 207) on 021-35311861-64 or email at

Sara Ahmed

Applicable Rating Criteria: Industrial Corporates (May 2023)
VIS Issue/Issuer Rating Scale

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