Press Release
Date: 26-Aug-22
PACRA Maintains Broker Fiduciary Rating of IGI Finex Securities Limited

Rating Details Rating Type BFR
Dissemination Date Current (26-Aug-22 ) Previous (27-Aug-21)
Action Maintain Initial
Rating BFR 2+ BFR 2+
Outlook Stable 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 four directors on board including CEO and Chairman. All the directors 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 Compliance 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 Finex 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, satisfactory financial strength, and dynamic team of experienced and competent individuals. Appointment of 'A' category external auditors, the establishment of two board-level committees, and outsourced internal audit function augur 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 112mln with an equity base of ~PKR 328mln at end-Jun'22. The income from equity brokerage stood at ~PKR 67mln for 1HCY22, depicting a decline of ~62% due to an industry-wide downward trend in volumetric activity. Despite of huge decline in commission income, the Company managed to remain in profit. The profit after tax came in at ~PKR 5mln for 1HCY22. The ratings are dependent on the management's ability to maintain and enhance its market share to improve its competitive position in the brokerage industry.

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

Methodology | Broker Fiduciary Rating | Jan-22

Sector Study | Brokerage & Securities | Jan-22

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.