Press Release

VIS Assigns Initial Ratings to OBS Pharma (Private) Limited

Karachi, Jun 16, 2023: VIS Credit Ratings Company Ltd. (VIS) has assigned initial entity ratings of ‘A/A-1’ (Single A/A-One) to OBS Pharma (Private) Limited (OBS Pharma). Medium to long-term ratings of ‘A’ signifies good credit quality with adequate protection factors. Risk factors are considered variable if changes occur in the economy. Short term ratings of ‘A-1’ denote high certainty of timely payment, excellent liquidity factors supported by good fundamental protection factors; risk factors are minor. Outlook on the assigned ratings is ‘Stable’.

OBS Pharma (Pvt.) Limited is a Special Purpose Company (SPC) created to acquire 12 pharmaceutical brands and a manufacturing facility based in Lahore from Bayer. It is a 100% subsidiary of Aitkenstuart Pakistan (Pvt.) Limited, with the ultimate parent company being West End 16 Pte Limited, Singapore. The agreement for the acquisition was made on November 21, 2022, and the total funding requirement for the acquisition is PKR 7,000mn which includes the purchase price, expenses and working capital requirements. The proposed capital structure consists of 75% debt (PKR 5,250mn) and 25% equity (PKR 1,750mn).

Assigned ratings take comfort from being part of a leading group in the healthcare segment. At present, OBS ranks amongst the top ten local pharmaceutical groups in Pakistan with a group turnover of ~PKR 19,000mn in CY22. Furthermore, ratings take into account business risk profile supported by non-cyclical nature of the industry and steady demand growth.

The acquired portfolio predominantly comprises of women’s healthcare and dermatology products, with leading brands namely Ciproxin, Gravibinan, Travocort, and Primolut N. Ratings incorporates the leading position of the brands in their respective molecular categories. High relative market share and brand value of these major products provides comfort to ratings, albeit product portfolio concentration remains high. Gradual growth in profitability indicators is anticipated due to expected price increases and an increase in volumetric sales through organic growth of the current portfolio further supported by enhanced marketing efforts planned for the target products. However, currency volatility poses a risk to profit margins. Liquidity indicators also indicate long-term improvement. While gearing and leverage ratios of the Company are significantly inflated due to the acquisition debt, projected profit retention and annual repayments are expected to lead to gradual improvement going-forward. Accordingly, achievement of projected plans remains a key ratings driver.

For further information on this ratings announcement, please contact Mr. Saeb Muhammad Jafri (Ext: 202) or the undersigned (Ext: 207) at 021-35311861-64 or email at

Sara Ahmed

Applicable Ratings Criteria: Industrial Corporates (May 2023)

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 2023 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .