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The Pakistan Credit Rating Agency Limited
Press Release

Date
12-Jun-18

Analyst
Raniya Tanawar
raniya.tanawar@pacra.com
+92-42-35869504
www.pacra.com

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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

PACRA Assigns Initial Entity Ratings to Awami Agro Commodities

Rating Type Entity
Current
(12-Jun-18)
Action Initial
Long Term BB+
Short Term A3
Outlook Stable
Rating Watch -

The rating demonstrates the strength of family owned partnership and explicit experienced background. The strategy of the company encompasses maximizing the returns through gaining new markets. The partners of the business are well equipped with knowledge of Rice business. Management of the company aims to target markets of non-basmati segment of Rice business. Product specific approach restricts the company’s turnover, however cost efficiency paves the road for adequate margins. As Awami Agro is a partnership, governance structure reflects needs for improvement. The company has adopted a bottom line centric approach by majorly targeting African regions. There are no long term debts in the books of Awami Agro except export re-finance facility, availed for the first time since its establishment, keeping the leverage in comfortable zone.
The ratings are dependent upon the sustainable profits; low or no leverage adhering to meagre risk profile of the business. Lack of proper board structure is a concern. Sustainable profits, adequate cash flows and working capital cycle are majorly backed by reasonable turnover.

About the Entity
Awami Agro Commodities, established in 2012 by two brothers’ Mr. Bhagwan Das and Mr. Sanjesh Kumar, a Partnership, family owned business. Awami Agro Commodities is one of the sustainable companies of rice exports. The business holds the membership of Rice Export Association (REAP) and Karachi Chamber of Commerce & Industry (KCCI).

Mr. Bhagwan Das and Mr. Sanjesh Kumar, 50% holding each, are the faces behind the name Awami Agro Commodities. Mr. Bhagwan Das has three brothers: Sanjesh Kumar, Naresh Kumar and Govinda Kumar, all associated with Awami Agro. The entire family is in rice industry for past three decades and Mr Vishnu Mal, father of Mr. Bhagwan Das, also owns a company in interior Sindh; Awami Rice Mills.

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.