Rating Details	Rating Type	BFR
	Dissemination Date	Current (27-Aug-21 )
	Action	Initial
	Rating	BFR 2+
	Outlook	Stable
	Rating Watch	-

Rating Rationale	Factor	Comment
	Ownership	IGI is a wholly owned subsidiary of IGI Holdings Ltd. IGI's competitive edge lies in its distinct corporate culture and client centric approach.
	Governance	IGI has five directors on board including CEO and Chairman. All the directors are executive except the Chairman and possess manifold experience in relevant fields.
	Management and Client Services	IGI's team comprised of experienced and well trained staff supported by qualified research team with wide coverage of economy and all major sectors as well as state-of-the-art web and mobile trading.
	Internal Controls and Regulatory Compilance	IGI has formulated employee confidentiality agreement, insider trading guidelines, conflict of interest policy along with KYC and CDD policies.
	Business Sustainability	The topline of IGI lacks diversification in revenue stream and concentrated to the equity brokerage income. The Company is not running any proprietary book hence less exposed to market risk.
	Financial Sustainability	Leverage free capital structure and sizable liquid assets against trade related liabilities provide further support to rating.

Key Rating Drivers

The Broker Fiduciary Rating of IGI Securities Limited ("IGI" or "The Company") reflects IGI's association with a well-established group and dominant player in the industrial and services arena. The assigned rating is complemented by IGI’s adequate market share, well-built governance structure and satisfactory operating profitability and dynamic team of experienced and competent individuals. Appointment of 'A' category external auditors, establishment of two board level committees and outsourced internal audit function augurs well for insightful monitoring. IGI serves clients all across the spectrum comprising local and foreign institutions, corporate, high net worth and retail investors from its offices in six different cities. The Net Capital Balance of IGI clocked in at ~PKR 98mln with an equity base of ~PKR 316mln as at end-CY20. While the equity brokerage income clocked in at ~PKR 187mln at end-CY20 (CY19: ~PKR 97mln). The Company earned profit amounting to ~PKR 36mln during CY20 (CY19: ~PKR 13mln). Sustainability of market share, retention of key personnel, adherence towards regulatory requirements and sustainability of profitability will remain imperative from ratings perspective.

About the Entity
	Legal Structure	Public Limited
	Year of Establishment	06-Jan-94
	Type of License	Trading and Self-clearing
	Majority Ownership	IGI Holding Limited

Regulatory Disclosures	Analyst	Applicable Criteria	Related Research
	Afnan Iqbal afnan.iqbal@pacra.com +92-42-35869504 www.pacra.com	Methodology | Broker Fiduciary Rating | Jan-21	Sector Study | Brokerage & Securities | Jan-21

Disclaimer

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