PACRA assigns Initial Entity Ratings to Meskay & Femtee (Pvt) Limited

The ratings reflect long presence of the sponsors in rice industry and prominent name in the rice export market. The family has a rich experience of the rice export market and also has stake in the rice market in addition to Meskay. Meskay has expanded its capacity; the two new lines have been recently commissioned, eventually strengthening the business profile of the company. The growth in topline and persistent profitability is the company’s forte. There is an element of devaluation impact, as well. The equity has also improved due to internal generation of funds. The second generation is playing a vital role in the growth of Meskay. The challenge remains in the cyclical nature of the rice business. The governance is concentrated in family's hand, whereas corporate structure may evolve. The working capital cycle is business-oriented, creating need for short term borrowing over a relatively longer horizon.
The ratings are dependent on Meskay's prominence in the industry and financial profile of the rated entity. Any dilution in business volume and profits would be considered negative.

About the Entity
Meskay & Femtee (Pvt.) Limited is a Private Limited company established on 1993. The company is engaged in processing and trading business of rice. Meskay & Femtee is one of the largest exporters of rice in the domestic landscape. In 1998, Meskay and Femtee (Pvt.) Limited became a full-fledge milling business. Meskay & Femtee Pvt Limited is owned by four individuals. Mr. Teka Mal( (46.80%), two sons, Mr. Mukesh and Mr. Manoj holds ~22.4% each while Mrs Sundari, Wife of Mr. Teka Mal, holds the remaining. Meskay’s board comprises four members who are also shareholders of the company.