Press Release

VIS Reaffirms Entity Ratings of Growth Securities Private Limited

Karachi, May 09, 2022: VIS Credit Rating Company Ltd. has reaffirmed the entity ratings of Growth Securities Limited (GSPL) at ‘A-/A-2’ (Single A minus/A-Two). Outlook on the assigned ratings is ‘Stable’. The long term rating of ‘A-’ signifies good credit quality with adequate protection factors. Risk may vary slightly from time to time because of economic conditions. Short term rating of ‘A-2’ depicts good certainty of timely payment where liquidity factors are sound and good access to capital markets. Previous rating action was announced on May 21, 2021.

The assigned ratings take note of unique business model concentrated in ready future arbitrage business that entail minimal market based risk. The revenue from ready future arbitrage contributes on average around 70% to the revenue base while remaining emanates from equity brokerage and corporate advisory/underwriting services. The business of GSPL is impacted by the size of volumes at the local bourse, thereby cyclical nature of the capital market continue to remain a key risk factor for the Company as well and with current soft economic situation at the domestic capital market, profitability of the company and the brokerage industry is expected to come under pressure.

In 2021, healthy growth in income from ready-future business and brokerage commission boosted profitability of the Company which was supported by positive investor sentiment and dovish monetary policy. However, the growth did not sustain in H’FY22 in tandem with market trading volumes. The Company plans to grow business within advisory services to support bottom-line amid dull investor activity. Ratings remain constrained by low diversification in revenues origination and room for improvement exists in corporate governance framework in terms of board size.

Ratings incorporates financial risk profile of GSPL. Overall liquidity profile is considered satisfactory in view of sizeable liquid assets in relation to total liabilities. Exposure to credit risk and market risk is limited. The management follows a conservative financial policy with minimal bank borrowings leading to low capitalization indicators. The Company also draws support from Sponsor loan while sustained availability of the same will remain important from ratings perspective. In addition to that, the assigned ratings remain dependent on maintaining financial risk indicators aligned with the assigned rating.

For further information on this rating announcement, please contact Ms. Nisha Ahuja, CFA (Ext: 204) or at (021) 35311861-66 or email at

Javed Callea

Applicable Rating Criteria: Methodology - Securities Firms - July 2020

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