PACRA Maintains Entity Ratings of IGI Holdings Limited

IGI Holdings Limited ("IGI Holdings" or "the Company"), has emerged as a new entrant in the growing Holding Companies Sector post restructuring of IGI Insurance Limited, consolidating Packages Group investments 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, the investment arm of the group, has a sizeable investment portfolio comprising strong players mainly financed through equity. IGI General Insurance has shown growth in business volumes as well as profitability, while IGI Life is pursuing it's growth strategy through market penetration and new products. The dividend flow from IGI Investments, a dominant contributor, remained subdued in 9MCY19 owing to impact of general economic conditions on the underlying investments. This impacted the revenue of IGI Holdings. Meanwhile, the Company injected further equity and increased its stake in IGI Life. The financial profile of the Company remains robust with low geared capital structure, although borrowings increased on YoY basis, strong coverage and adequate cushion in financing facilities. The Company has a strong governance framework. The system and controls to monitor investments and make key strategic investments are 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 incorporated as a public limited company in 1953, is an Investment Holding Company for financial services business of Packages Group. The Company 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 was 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 30, 2019, IGI Holdings majority ownership (71%) lies with Packages Group through Sponsors (32%) and associated entities (39%). Mr. Syed Babar Ali serves as the Chairman of the Board while Mr. Tahir Masaud is the CEO of the Company.