The Pakistan Credit Rating Agency Limited
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Faiqa Qamar

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PACRA Maintains Entity Ratings of TPL Corp Limited

Rating Type Entity
(18-May-21 )
(18-May-20 )
Action Maintain Maintain
Long Term A A
Short Term A1 A1
Outlook Stable Stable
Rating Watch - -

The rating reflects TPL Corp Limited's ("TPL Corp" or "the Company") diverse pool of investments and its evolving structure as a Holding Company. TPL Group entered in the business arena through vehicle tracking and insurance business. The existing investment portfolio is still evolving. TPL Insurance remains a stable investment on the Company's book. Moreover, TPL Trakker Limited and TPL Properties Limited remain prominent players in respective sectors. However, all the investments are yet to generate sizeable dividends for the Company. TPL Life Insurance Limited provides complete health and life insurance products. TPL Security Services provides security solutions. The merger of TPL Maps and TPL Rupiya into TPL Trakker is expected to bring in synergy at Group level.
On standalone basis, TPL Corp has yet to receive consistent dividends/payout from its investments. The Company has recently divested its stake in TPL Insurance as DEG (Deutsche Investitions- und Entwicklungsgesellschaft), a wholly owned subsidiary of KFW Group based in Germany, has acquired 19.9% stake through issuance of ordinary shares other than a right issue. Meanwhile, listing process of TPL Trakker on Pakistan Stock Exchange concluded in Aug-20 while, shares remain over subscribed. The sale transaction of Centrepoint from TPL Properties balance sheet, to Bank Al Habib, has been completed lately. These initiatives have been delayed amidst COVID-19 outbreak and prevailing economic conditions, however, have generated sufficient funds for the Group. The Company raises debt through utilizing borrowing lines and term loan to meet financing requirements of its subsidiaries/associated companies and to settle inter-company balances, respectively. The coverages may remain constrained in the absence of material dividend income but rate cut (625 bps) by SBP would provide the respite. The ratings take comfort from demonstrated support of sponsors to provide support and raise funds. Strong governance framework remains beneficial for the ratings.
The ratings depend on the projected performance of existing strategic investments. Any significant delay in materialization of envisaged business strategies to generate funds for the Company leading to low return on investments and/or compromised position of the Company to meet its financial obligations will impact the ratings. Maintenance of adequate resources for repayment would be crucial.

About the Entity
TPL Corp Limited (formerly known as TPL Trakker Limited) is a public limited company listed on Pakistan Stock Exchange. The Company is principally engaged in making investments in Group and other companies. TPL Trakker Limited was incorporated in Pakistan on December 04, 2008, as a private limited company and converted into public company in 2009 and got listed on Pakistan Stock Exchange Limited on July 16, 2012. The name of the Company has been changed to TPL Corp Limited w.e.f. November 24, 2017.

TPL Corp is majorly owned by its parent company, TPL Holdings (Pvt.) Limited (~62%). Around 6% shares are held by the financial institutions. Remaining shares are owned by the local and foreign individuals.

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.