PACRA Updates Entity Ratings of TPL Corp Limited

TPL Corp Limited is a holding company for TPL Group. As a holding company, TPL Corp maintains a broad investment portfolio across multiple sectors. Its key subsidiaries include TPL Trakker Limited (TPLT), offering customized digital mapping and tracking solutions; TPL Insurance Limited (TPLI), engaged in general insurance and Window Takaful operations; and TPL Properties Limited (TPLP), which has redefined its business model through the establishment of a REIT Management Company (RMC) and investment in TPL REIT Fund I. The group saw a major transformation when it sold off one of the signature towers Centrepoint via its real-estate arm TPL Properties Limited a 28-storey building located in Karachi. The Group made fresh investments and enhanced some of its existing investment avenues over the last couple of years. Most of these investments, indeed the sizeable ones, were made in the real estate sector. With the prevailing environment, the prospects appear subdued. Apart from that, no new dividend stream was built. TPL Life Insurance Limited achieved listing through a reverse merger with Dar Es Salaam Textile Mills Limited, while TPL E-Ventures focuses on venture capital investments in startups and fintech. More recently, in partnership with Abhi (Private) Limited, TPL Corp completed the acquisition of FINCA Microfinance Bank Limited, marking its strategic entry into the banking sector.
As a holding company, TPL had reliance on dividend income and capital gains. The dividend flow has not reached a significant level. Plus, the capital gains require intended transactions to mature, which is a time taking process, dependent on right pricing and time for execution. As a consequence, the business and financial risk profit the company has plummeted. The sponsor has been able to keep the company float. The capacity for personal financial support is inherently constrained and additionally, the exact quantum remains uncertain and there is always an element of unpredictability. In cognizance of this, the management is following a plan to divest some of its key assets to bridge the liability mismatch. A number of options to raise funds including right shares and financing against shares is also being pursued. Time is crucial, since delays would create more fiscal pressures. To monitor the progress, rating watch has been assigned to the ratings of the Company. Meanwhile, the outlook remains developing. The timely settlement of upcoming debt maturities remains important.
The ratings depend on the extent of perceived support from the parent organization. Projected performance of existing strategic investments remains essential for the company to stand on its own footing and be able to repay the loans obtained from the sponsors, while meeting other obligations.

About the Entity
TPL Corp is a public listed company. TPL Corp is majorly owned by its parent company, TPL Holdings (Pvt.) Limited (~62%). Meanwhile, ~0.03% of shares of the Company are held by mutual funds. The Company has a free float of ~35% through local and foreign individuals. Mr. Ali Jameel, an established entrepreneur, is the CEO and is aided by a team of experienced professionals.