PACRA Maintains Entity Ratings of Mega Conglomerate (Pvt.) Limited

The ratings reflect the affiliation of Mega Conglomerate (Private) Limited (“the Company”) with the Mega Group, one of Pakistan’s most prominent conglomerates with a strong presence across energy, cement, shipping, logistics, terminals, real estate, oil and gas, auto and food industries. The Company operates as a holding entity, strategically structured to consolidate the Group’s investments in energy, real estate, and food sectors. Its primary revenue source is dividend income from these investments, with a substantial contribution from The Hub Power Company Limited (HUBCO), where it holds a significant 19.4% ownership stake. This steady flow of dividend income, complemented by returns from other portfolio investments, has bolstered the Company’s financial performance—a trend that continued in FY24 and is expected to remain stable. In FY24, the Company took steps to deleverage its balance sheet by replacing commercial long-term debt with an increased subordinated, interest-free loan from an associated undertaking. This move not only released secured assets but also reduced financial costs, improving profitability. The Company retains substantial exposure to related parties. Looking ahead, the Group’s planned foray into the electric vehicle market through Mega Motors may necessitate additional equity injections, potentially increasing leverage at the Group level. Maintaining financial discipline, particularly in managing investment income, will be critical for preserving and enhancing ratings. Nevertheless, the Company’s financial resilience is supported by its ample liquid investments, particularly in Term Finance Certificates (TFCs), and the expectation of sponsor support if required.
The ratings are closely tied to the performance of the Company’s strategic investments and the successful implementation of its business strategies, supported by a consistent dividend stream from its investment portfolio. Additionally, enhancing the governance framework and resolving the issues highlighted by the external auditor will be essential for sustaining and improving the ratings in the future.

About the Entity
Mega Conglomerate (Pvt.) Limited was incorporated as a private limited company in 2010 under the repealed Companies Ordinance, 1984 (Companies Act 2017). Mr. Habibullah Khan is the founder and Chairman of Mega Group, which is over 5 decades old. Mr. Khan also holds the position of CEO of the Company and serves as Chairman of the Board. The Company has strategic investments of approx. PKR: 26bln in the associated company - The Hub Power Company Limited (HUBCO) and in two wholly owned subsidiaries—Mega Foods (Pvt.) Ltd., and G4 Mega Pakistan (Pvt.) Ltd. (G4). The Company is owned by Mr. Habibullah Khan (~ 88%) and Mrs. Nusrat Khan (~ 12%).