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

Rating Type Entity
(18-May-23 )
(18-May-22 )
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 harmonious with the defined strategic plan. TPL Trakker Ltd. (TPLT) offers tailored solution. TPL Insurance Ltd. (TPLI) ensured operational efficiency over years. The Company's recent investment in TPL REIT Management Company (TPL RMC), through TPL Properties Ltd. (TPLP), is expected to bring synergy at Group level from its 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, while 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, and Finnish Fund for Industrial Cooperation Ltd. has acquired 15.87% and 17.02% stake, respectively, through issuance of ordinary shares other than a right issue. These foreign collaboration are expected to enable TPLI to invest in tech-driven products; thereby, increasing insurance penetration in Pakistan. Multiple revenue generating avenues are near completion in TPLT, where major portion of capital expenditure has already been incurred. TPLT achieved listed status in Aug-20. TPLP has re-strategized its business model by setting up a REIT Management Company (RMC), as subsidiary, and making substantial investment in TPL REIT Fund I (proposed size - PKR 80bln, first close - PKR 18.35bln, raised till now - PKR 14.98bln). The fund is expected to flow in substantial capital gains, as dividends and developer margins. To meet financing requirements for its subsidiaries/associated companies and to settle inter-company balances the company raised debt through various financing arrangements i.e. during June 2022, the Company issued two long-term instruments PP Sukuk (for PKR. 2.2bln) & PPTFC (for PKR. 2.3bln), each for 5 years.
On a 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 previously known as TPL Trakker, is a public listed company and is engaged in making investments in Group and other companies. TPL Trakker was incorporated in Pakistan on 04-Dec-08, as a private limited company and was converted into a public company in 2009. The Company was listed on Pakistan Stock Exchange Limited on 16-Jul-12. The Company's name was changed to TPL Corp Limited w.e.f. 24-Nov-17. TPL Corp is majorly owned by its parent company, TPL Holdings (Pvt.) Limited (~62%). Meanwhile, ~0.5% of shares of the Company are held by mutual funds. The Company has a free float of ~31% through local and foreign individuals. Mr. Ali Jameel heads the Company as the CEO and is aided by a team of experienced professionals.

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.