PACRA assigns Entity ratings to JS Investments Limited (JSIL)

The assigned rating reflects JS Investments Limited's (“JSIL” or the “Company”) highly experienced and skilled team, robust governance framework, strong risk and compliance management, and a disciplined and well-structured investment process. The Company's focus on building a technology platform and revenue stability through a diversified product mix, including fee income from CIS, REIT, and SMAs, are key rating drivers. The investment team benefits from strong trading support and automated, scalable systems, ensuring efficient operations. Policies, risk budgets, and limits are well-defined across all funds. The Company has significantly invested in digital services to enhance customer engagement, offering solutions like customer onboarding, SMA wealth management, digital pension fund onboarding, and a WhatsApp bot. The Zindigi App, aimed at Gen Z and millennials, delivers user-friendly financial solutions. These technological investments have driven notable inflows through digital channels. The AUMs of the Company reached ~PKR 101bln, growing ~51% since Dec'2023, capturing ~3% market share as of the end Nov'2024. In addition, ~PKR 21bln was contributed by Advisory funds and PKR 2.2bln by REIT Scheme. While the AUM mix leans toward corporates, enhanced retail penetration is expected to yield competitive advantages. A high concentration of investments among the top 10 investors necessitates a focused diversification strategy to enhance long-term stability and mitigate redemption risk.
As of Dec'2023, the Company earned a management fee of PKR 258mln from the collective investment scheme (CIS) including PKR 7.9mln from Rental REIT Fund (Dec'2022: PKR 173mln including PKR 3.9mln from Rental REIT Fund). Whereas, the Company earned a fee of PKR 0.6mln from SMA portfolio. During 9MCY24, the Company reported a 100% increase in management fee, reaching PKR 343mln (9MCY23: PKR 171mln) and PKR 0.17mln from SMA portfolio. Supported by higher core revenues, realized/unrealized investment gains, and dividend income, profitability rose to PKR 256mln (9MCY23: PKR 117mln). The Company's equity stood at PKR 1.9bln as of Sep'2024 (Dec'2023: PKR 1.7bln). The Company has zero leveraging and its liquidity position remains comfortable. The rating incorporates the Company's association with JS Bank Limited and potential synergies due to the established presence of JS Group in the financial sector.
The rating relies on the Company’s ability to enhance its market position in relative universe maintain superior fund performance, and uphold strong governance and organizational structure. Improving investor granularity and increasing retail penetration through digital channels will be crucial.

About the Entity
JS Investments Limited, established in 1995, is listed on the Pakistan Stock Exchange. The Company is part of the Jahangir Siddiqui (JS) Group. JS Bank Limited holds ~85% shareholding in the Company. JS Group has a strong presence in the financial sector with entities operating in the banking, insurance, brokerage, and asset management sectors. The group has recently ventured into energy infrastructure and OMC segments. JSIL possesses licenses for Asset Management, Investment Advisory, Private Equity/Venture Capital, and REIT management. JSIL’s control lies with an eight-member Board of Directors, including the CEO. The Board comprises three independent directors, with all other directors, except the CEO, being non-executive.