PACRA Maintains Entity Ratings of IGI Holdings Limited
The ratings reflect IGI Holdings Limited's ("IGI Holdings" or "the Company") very strong profile as an investment holding company. IGI Holdings consolidates Packages Group's investments in the financial sector i.e. Life & Non-life Insurance and Brokerage. Moreover, the Company holds investments in diversified sectors through a wholly-owned subsidiary, IGI Investments (Pvt.) Ltd (IGI Investments), an investment holding company. The Company has a well-developed mechanism for overseeing the investment management and monitoring process along with making new investments, an important requisite for any holding company. The Company's key underlying investments are performing well in their respective sectors, providing a steady stream of dividends. IGI Investments has a sizable investment portfolio comprising strong players mainly financed through equity. IGI General Insurance posted stable growth in terms of business volumes and in turn profitability; while IGI Life is pursuing growth strategy. Lately, IGI Life has started to generate profits. The Company holds a strong financial risk profile owing to strong coverages and significant liquidity showing a robust position. The Company has loaded short-term debt to fund the timing difference between dividends. However, leveraging remains minimal with largely an equity-based capital structure. Moreover, very strong business acumen of the sponsoring family and strong governance practices provide support to the ratings.
Ratings depend upon sustained performance of existing strategic investments, along with a strong investment and governance framework. Formalizing a strong and effective mechanism for monitoring performance and providing holistic direction to its subsidiaries, along with investment diversification would bode well for the ratings.
IGI Holdings Limited, incorporated as a public limited company in 1953, is an Investment Holding Company for financial services business of Packages Group. The Company completed its corporate restructuring during 2017 involving amalgamation of IGI Investment Bank into IGI Insurance Limited and demerger of Insurance segment and Investment segment resulting in wholly owned subsidiaries i.e. IGI General Insurance Limited and IGI Investments (Pvt.) Limited. As a result, IGI Insurance was renamed to IGI Holdings Limited. The investment portfolio comprises four subsidiaries in the financial sector; IGI General Insurance, IGI Life Insurance, IGI Investments, and IGI Finex Securities. As of Sept-22, IGI Holdings majority ownership (~ 74) lies with Packages Group through Sponsors (~ 34%) and associated entities (~ 40%). The Company has a free float of ~ 26%. Syed Babar Ali serves as the Chairman of the Board while Mr. Tahir Masaud is the CEO of the Company.