PACRA Maintains Entity Ratings of Providus Capital (Pvt.) Limited

The entity ratings of Providus Capital (Pvt.) Ltd reflects the robust performance of the company despite depressed equity market conditions. The ratings incorporate the strong business acumen, optimal utilization of in-house investment and research expertise resulting in accumulation of a diversified and liquid investment portfolio. The company funds its investment book using a mix of equity, bank borrowings and internal returns. Lately, the company formed a subsidiary 'Providus Investments (Pvt.) Ltd to carry out business of equity market investments. The ratings also consider better control through technology, sponsors' commitment and prudent management to maintain a minimum buffer of 5% over and above the margin requirements (30-35%) of accumulated bank borrowings. The ratings take further comfort from the company's commitment to limit long term leveraging. Reliance on key individuals remains high. Meanwhile governance framework can be strengthened.
The ratings are dependent on sponsor’s continued commitment and adherence to liquidity management policies. Effective investment management and ability to capitalize on growth opportunities to retain strong performance is imperative. Excessive long term as well as short term borrowings leading to higher leverage and/or deterioration in coverages can impact ratings adversely. In addition, deterioration in equity base prolonged distressed performance and/or erosion of buffer margin will lead to downward pressure on ratings.

About the Entity
The Company is owned by Mr. Muhammad Jawaid Iqbal (CEO) and by his spouse (50% each). The Company is primarily engaged in the business of capital investments, in particular equity market and other investments. The Company’s board comprises only two members, Mr. Jawaid Iqbal (CEO) and an executive director. The CEO, a CFA charter holder, possess vast experience in investment management and served as one of the key personnel in the establishment of ABL Asset Management Company and remained a board member for six years afterwards. The company has three main departments supervised by a head of department (HOD). All HOD’s are capable individuals with right mix of qualification, skills and experience. The company has improved the MIS framework, which is now fully integrated and can generate real time reports.