Press Release

VIS Maintains Entity Ratings of Growth Securities Private Limited

Karachi, June 13, 2023: VIS Credit Rating Company Ltd. has maintained the entity ratings of Growth Securities Limited (GSPL) at ‘A-/A-2’ (Single A minus/A-Two). Outlook on the assigned ratings has been revised to ‘Negative’ from ‘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 weak macroeconomic indicators, political turmoil, hike in interest rate and continuous depreciation in Pakistani rupee. 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 10, 2022.

The revision in outlook takes into account adverse industry trend, wherein a contraction in trading volumes has been reported, which also affected trading revenues of the Company. Operating profile also witnessed significant deterioration, GSPL’s profitability profile weakened led by losses on the back of decrease in core revenue in HFY23. During FY22, the Company’s major portion of revenue emanated from underwriting business but the same witnessed decline during HFY23. With market performance projected to remain subdued, profitability is expected to remain under pressure, which will remain important for rating perspective.

Rating takes comfort from growing domestic institutional client base. During the year, the Company engaged in business with 10 new institutional clients. Increase in the number of domestic institutional clients is primarily on account of Company’s change in business strategy to reduce dependence on brokerage segment and generate more business from the mutual fund and government borrowing market. Assessment of financial profile indicates manageable capitalization indicators despite decline in equity base end-HFY23. Given contraction in reserves and the acquisition of short term loans, gearing indicator stood at 0.37x end-HFY23 (FY22: 0.3, FY21: 0.2) while leverage indicator was 0.4x (FY21 0.3x, FY21 0.3x) Liquidity profile of the company is considered sound, having 3.18x total liquid assets to total liabilities coverage during review period. Steady deterioration is witnessed due to less participation in propriety activities. Going forward, the maintenance of ratings remain sensitive to continued sponsor support through sponsor loans and maintenance of business and financial risk metrics in line with threshold for the assigned rating.

For further information on this rating announcement, please contact Ms. Syeda Batool Zehra Zaidi (Ext: 210) or at (021) 35311861-66 or email at

Muhammad Bilal Aftab

Applicable Rating Criteria: Methodology – Securities Firms - July 2020

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