Analyst
Ayesha Qasim
ayesha.qasim@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Assigns Initial Entity Ratings to IGI Holdings Limited
Rating Type | Entity | |
Current (20-Dec-18 ) |
||
Action | Initial | |
Long Term | AA | |
Short Term | A1+ | |
Outlook | Stable | |
Rating Watch | - |
Post restructuring formerly known IGI Insurance Limited has now been converted to a Holding Company (holdCo). The restructured Company, now known as IGI Holdings Limited, has emerged as a new entrant in the growing Holding Companies Sector, consolidating Packages Groups investment in financial sector i.e. Life and Non-life Insurance, Brokerage and investment holding Company. The ratings reflect IGI Holdings strong standing as a holdCo with its key underlying businesses performing well in their respective sectors, providing a steady stream of dividend. IGI Investments has a sizeable investment portfolio comprising strong players which is mainly financed through equity. IGI General Insurance has shown growth in business volumes as well as profitability, while IGI Life is continuing its growth strategy through market penetration and new products in line. The holdCo’s low geared capital structure adds strength to the financial profile. The Company has a strong governance framework. The system and controls to monitor investments and make key strategic investments is evolving.
Ratings depend upon sustained performance of existing strategic investments. Formalizing a strong and effective mechanism for monitoring performance and providing holistic direction to it's subsidiaries would bode well for the ratings.
About
the Entity
IGI Holdings Limited (formerly IGI Insurance Limited), incorporated as a public limited company in 1953, is an Investment Holding Company for financial services business of Packages Group of Syed Babar Ali. The Company has completed its corporate restructuring during 2017 involving amalgamation of IGI Investment Bank into IGI Insurance Limited and demerger of Insurance segment and Investment segment resulting into into wholly owned subsidiaries i.e. IGI General Insurance Limited and IGI Investments (Private) Limited. As a result IGI Insurance has been renamed to IGI Holdings Limited. The investment portfolio comprises four subsidiaries in financial sector; IGI General Insurance, IGI Life Insurance, IGI Investments and IGI Finex Securities. As at Sept'18, IGI Holdings majority ownership (70%) lies with Packages Group through Sponsors (35%) and associated entities (35%). Mr. Syed Babar Ali serves as the Chairman of the Board. Mr. Tahir Masaud is the CEO of the Company.