The Pakistan Credit Rating Agency Limited
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PACRA Maintains Entity Ratings of TPL Corp Limited

Rating Type Entity
(18-May-22 )
(18-May-21 )
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 Trakker Ltd. (TPLT) and TPL Insurance Ltd. (TPLI) remain prominent players in respective sectors. The recent investment in TPL REIT Management Company (TPL RMC) through TPL Properties Ltd. (TPLP) is expected to bring synergy at Group level from its initial three projects - Technology Park, One Hoshang, and Mangrove. TPL Life Insurance Ltd. (TPL Life) provides complete health and life insurance products. TPL Security Services (TPL Security) provides security solutions. TPL E-Ventures explores business opportunities and invest in start-ups as well as in Fintech.
The Company has divested its stake in TPLI 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, TPLI has entered into a share subscription agreement with the Finnish Fund for Industrial Cooperation Limited, a Pvt. Ltd. Co. incorporated in Finland, (“Finnfund”), of ~ 14.97% of the total post-issued shares subject to obtaining all regulatory approvals. This foreign collaboration will enable TPLI to invest in tech-driven products; thereby, increasing insurance penetration in Pakistan. Subsequent to the listing of TPLT on the Pakistan Stock Exchange in Aug-20, the subsidiary showed an improved performance during 3QFY22 supported by digital mapping and location services. TPLP is eyeing on timely and successful issuance of all tranches of the first hybrid Shariah Compliant REIT Fund through TPL RMC, a subsidiary of TPLP. Moreover, TPLP is expecting to receive dividends and developer margins from TPL REIT Fund. The Company raises debt by utilizing borrowing lines to meet financing requirements for its subsidiaries/associated companies and settle inter-company balances. During Nov-21, the Company planned to issue two long-term instruments, PP Sukuk and PPTFC, of PKR 2.5bln each. At present, both instruments are partially drawdown for ~PKR 1.4bln and PKR 1.2bln, respectively. On standalone basis, TPL Corp has yet to receive consistent dividends/payout from its investments. The coverages may remain constrained in the absence of material dividend income. However, 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.