PACRA Maintains Rating of Jahangir Siddiqui & Co. Limited-TFC X | Jul-17
|Rating Type||Debt Instrument|
The ratings reflect Jahangir Siddiqui & Co. Ltd.'s (JSCL) strong presence as a Holding Company in the financial sector with a basket of strategic investments most prominent of which are JS Bank, BankIslami Pakistan, EFU Life Assurance and EFU General Insurance. JS Bank is on its path to establish itself in the medium sized banking sector. BankIslami aims to expand its lending portfolio by funding through low cost deposits, however, the bank’s lending portfolio has slimmed down while NPLs has witnessed an upward trend during 9MCY18, which is a concern. Meanwhile, EFU Life and EFU General continue as a stable income stream for the Company. JSCL is increasing its stake in EFU General Insurance gradually and has made significant progress with its diversification strategy in energy, petroleum, and infrastructure segment. The Company has made ~PKR 2bln investments in LPG Storage and Oil Marketing businesses. This is predominantly being funded by debt instruments. Although the investment activity has increased the debt exposure for the Company, it still remains within moderate limits.
Ratings draw strength from the Company’s moderately leveraged capital structure and continuing growth trajectory in its existing strategic investments. Meanwhile, strict financial discipline in terms of coverages remains critical for ratings. Prolonged downturn in capital markets leading to substantial deterioration in the Company's investments will impact ratings.
Jahangir Siddiqui & Co. Ltd., successor to brokerage business started in early seventies by Mr. Jahangir Siddiqui, was established in 1991 and is listed on the Pakistan Stock Exchange (PSX). JSCL, JS Group’s flagship Holding Company, has portfolio of investments categorized into a) subsidiaries, b) available for sale, and c) held for trading. Investments in the financial segment dominate the portfolio, with significant concentration in the banking and insurance sector. New investment are in energy, petroleum and infrastructure sectors. JS Group owns 72.5% shareholding in the Company. Chief Justice (R) Mahboob Ahmed is Chairman of the BoD and Mr. Suleman Lalani, is CEO of the Company.
TFC 8 - Listed instruments of PKR750mln issued during Apr-14 secured against marketable securities. Markup is paid semi-annually at a floating rate of 6MK + 1.75% p.a. The TFC has an outstanding balance of PKR 131mln at year end Dec-18 and would fully mature in Apr-19.
TFC 9 – Privately placed instruments of PKR1,000mln issued during Jun-16 secured against marketable securities. Markup is paid semi-annually at a floating rate of 6MK + 1.65% p.a. Repayment started in Dec-17 and has an outstanding balance of PKR 625mln at Dec-18. The TFC would fully mature in Jun-21.
TFC 10 - Privately placed instruments of PKR1,500mln issued during Jul-17 secured against marketable securities. Markup is paid semi-annually at a floating rate of 6MK + 1.40% p.a. Repayment would start in Jan-19 and will fully mature in Jul-22.
TFC 11- Listed instruments of PKR 1,500mln issued during Mar-18 secured against marketable securities in a designated account with the CDC. Markup is paid semi-annually at a floating rate of 6MK + 1.40% p.a. Repayment would start in Sept-20 and will fully mature in Mar-23.