PACRA Assigns Initial Ratings to Zarea Limited

Zarea Limited ('ZAL' or the 'Company') is a tech-enabled B2B e-commerce platform transforming how industrial and agricultural commodities are sourced, traded, and distributed. By digitizing Pakistan’s historically fragmented industrial and agricultural supply chains and eliminating intermediaries, ZAL has rapidly scaled its transaction volume surpassing 17,000 orders across 50+ cities and secured long tenor offtake agreements with blue chip corporates. The company’s agile microservices architecture and real time order tracking capabilities confer substantial switching costs, reinforcing customer stickiness. Backed by a proprietary 10-year commodity data repository, ZAL has established itself as a credible supply chain partner in verticals such as cement, steel, fertilizers, corn, wheat, agriculture biomass and coal to name a few. ZAL’s pioneering entry into the agri-biomass segment previously informal and untapped positions it as the first structured corporate player in this domain. With strategic procurement contracts in place, the Company is poised to expand its footprint across Pakistan. This expansion aligns with the broader formalization trend of agricultural procurement in Pakistan, supported by rising smartphone penetration (~200 million subscribers, 75% coverage) and digitized infrastructure. The rating is anchored by ZAL’s adequate corporate governance framework, led by a seven-member board chaired by Ms. Misbah Momin and supported by independent board committees. The board includes distinguished members such as Mr. Sohail Wajahat Siddiqui (former Managing Director, Siemens Pakistan, ex-Federal Minister for Petroleum & Natural Resources), Mr. Junaid Akram (former bureaucrat & senior official, Federal Board of Revenue), and Mr. Muhammad Afzal Chaudhry (former senior banker with over four decades of experience in domestic and international financial institutions). Operational oversight is well-distributed across departments Sales & Marketing, Finance, Supply Chain, and Technology ensuring institutionalized control and execution capabilities.
On the financial front, ZAL posted exceptional topline growth of 173% YoY, with revenue reaching PKR 805 million in 9MFY25, driven by platform usage fees (PKR 294 million) and tech-enabled agri-commodity trading (PKR 512 million). Net profit surged ~132% to PKR 454 million, aided by substantial investment gains. The Company maintains a debt-free capital structure, a strong equity base of PKR 2.06 billion, and PKR 942 million in unutilized IPO proceeds, offering significant financial headroom. The remaining proceeds will be strategically allocated across both operating and capital expenditure to optimize working capital efficiency, enhance return on invested capital, and fortify core operational infrastructure. ZAL’s ten year tax exemption under the STZA regime further amplifies its free cash flow generation and enhances its interest coverage capacity, even under stress scenarios. While ZAL’s outlook remains stable, its business risk profile is moderately sensitive to cyber threats, transaction errors, technological obsolescence, and shifts in buyers’ behavior. Nonetheless, the Company’s agile platform, strong liquidity, and expanding user base provide resilience.
The assigned ratings remain contingent upon ZAL's ability to sustain margin resilience, strengthen liquidity buffers, and preserve capital discipline amid scale-up. Its forward-looking investment in the formalization of the agri-biomass vertical, coupled with continuous innovation and operating efficiency gains, will be pivotal in supporting the current credit profile.

About the Entity
Zarea Limited commenced operations as Vision 2A (Pvt.) Limited on September 16, 2020, underwent strategic rebranding in August 2022 to reflect its evolving digital mandate, and was subsequently converted into a public limited company on April 15, 2024. Headquartered at the National Aerospace Science and Technology Park (NASTP) in Lahore Cantt—an emerging innovation corridor—ZAL benefits from a forward-leaning governance and ownership structure. The Company is majority-owned by Mr. Ali Alam Qamar, who serves as its founder and chief executive, providing strategic direction and oversight.