Press Release
Date: 13-Jun-23
PACRA Maintains Broker Fiduciary Rating of Ismail Iqbal Securities (Pvt.) Limited

Rating Details Rating Type BFR
Dissemination Date Current (13-Jun-23 ) Previous (13-Jun-22)
Action Maintain Initial
Rating BFR 3 BFR 3
Outlook Stable Stable
Rating Watch - -

Rating Rationale Factor Comment
Ownership The rating incorporates the long-standing experience of the sponsor Mr. Ahfaz Mustafa who owns the majority shareholding of ~65%. Remaining stakes are divided among family members.
Governance Assigned rating takes into account governance framework consisting of two directors and one Board level committee. Inclusion of more board members along with independent representation may be consider
Management and Client Services The rating factor in a lean organizational structure comprising of a seasoned management team. The clients have been provided with access to online trading and in-house research services. The Company
Internal Controls and Regulatory Compliance The rating takes into account an adequate internal control framework which could be improved with the presence of an internal audit function. Separation of compliance function from finance is importan
Business Sustainability The Company relies on equity brokerage as the primary source of revenue. In line with the market activity, the revenue has declined during the 1HFY23. Diversification of product slate may provide supp
Financial Sustainability The Company is engaged in proprietary trading which exposes the bottom line to market volatility as could be seen from a loss after tax of ~PKR 26mln. A low leveraged capital structure brings comfort

Key Rating Drivers The assigned rating incorporates a sound business acumen of the sponsor, a seasoned management team, and a low-leveraged capital structure. However, the rating is constrained by the governance structure and internal control framework which may be improved further. The rating is dependent on maintaining the market share, low leverage metrics, retention of key management, and, improvement and sustainability in the financial profile.

About the Entity
Legal Structure Private Limited
Year of Establishment 06-Aug-04
Type of License Trading and Self-clearing
Majority Ownership Mr. Ahfaz Mustafa (~65%)

Regulatory Disclosures Analyst Applicable Criteria Related Research
Afnan Iqbal
afnan.iqbal@pacra.com
+92-42-35869504
www.pacra.com

Methodology | Broker Fiduciary Rating | Jan-23

Sector Study | Brokerage & Securities | Jan-23

Disclaimer This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA. The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.