The Pakistan Credit Rating Agency Limited
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Muhammad Nadeem Sheikh

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PACRA Assigns Initial Entity Ratings to Reliance International Commodities Export

Rating Type Entity
Action Initial
Long Term BB
Short Term B
Outlook Stable
Rating Watch -

The ratings reflect emergence of the Reliance International Commodity Exports (''Reliance'') as a growing IRRI rice exporter. In line with the overall industry changing trend, Reliance has shifted its export sales mix from China to African countries in the recent past. This has reaped better top-line growth but has also enlarged its cash conversion cycle. Reliance has marked its presence in African regions through two distribution entities and is committed to increase its foreign footing. Presence in local market remains indifferent. Profitability margins, that have a perceptible impact on the ratings, are low as compared to peers. Coverages diluted on the backdrop of higher interest costs, though still remained comfortable. Reliance's debt book solely comprises Export Refinancing Facility availed to fund its working capital needs. Bearing a sole proprietor status, the overall structure of Reliance is desirous of requisite governance and management framework. The CEO, Mr. Arif Hussain is the man behind the enterprise.

The ratings are dependent on Reliance's ability to sustain business profile and yield better profit margins. Meanwhile, prudent working capital management is imperative.

About the Entity
Reliance International Commodity Exports is a sole proprietorship. Reliance is involved in rice export business. It is wholly owned and managed by Mr. Arif Hussain. Mr. Arif Hussain is seasoned professional with experience of more than two decades. Mr. Arif remained president of Sindh & Baluchistan Rice Millers Association for tenure of 2007-2010 and 2010-2013. M/s Sajid & Co is the external auditor of the Reliance.

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's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. 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.