Press Release

VIS Assigns Preliminary Rating to Proposed Short Term Sukuk of Aspin Pharma (Private) Limited

Karachi, December 31, 2024: VIS Credit Rating Company Limited (VIS) has assigned a preliminary rating of ‘A1 (plim)’ (A one preliminary) to the Short-Term Sukuk issue of Rs. 2,000 million of Aspin Pharma (Private) Limited (‘APL’ or the ‘Company’). The short-term rating of ‘A1 (plim)’ indicates strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. The outstanding entity ratings of the Company are ‘A/A1’ (‘Single A/A One’) with a ‘Stable’ outlook.

Aspin Pharma (Private) Limited was incorporated as a private limited company on 14 December 2013. The registered office of the Company is situated in 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, distribution, wholesale and manufacturing of all kinds of pharmaceuticals.

The proposed instrument will be a privately placed, unlisted, and unsecured Short Term Sukuk (STS), up to Rs. 2,000 mn (inclusive of Rs. 500 mn Green Shoe Option) to support the working capital needs of the Company. Tenor of the instrument will be up to six (06) months from the date of first disbursement. Profit rate on the instrument will be 6 Month KIBOR+0.80%, subject to a defined floor and cap approved by the Shariah Advisor. Profit will be payable at the time of the maturity of the Sukuk along with the principal payment.

The assigned rating reflects the low business risk profile of Pakistan's pharmaceutical sector, marked by stable demand and low economic sensitivity, which supports steady revenue and profitability. Key factors such as population growth, disease prevalence, emerging illnesses, hygiene conditions, and increase in health awareness sustain the demand for pharmaceutical products. Furthermore, the recent deregulation of drug prices for non-essential medicines permits companies to independently increase prices, which were previously regulated, enhancing the sector's business risk profile

Assessment of financial risk profile reflects increasing revenue during the third quarter of the ongoing year, supported by price adjustments, cascading down to improved bottom line and higher margins. Liquidity metrics have strengthened, with improved cashflow coverages and a stable current ratio. Additionally, an expanded equity base and the repayment of long-term obligations have reduced leverage and gearing ratios, strengthening the overall capital structure. Maintenance of liquidity and capitalization metrics will remain important for ratings.

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


Applicable Rating Criteria: Corporates:
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
Rating the Issue
https://docs.vis.com.pk/docs/Rating-the-Issue-Aug-2023
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 2024 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .