The Pakistan Credit Rating Agency Limited
02-May-23
Analyst
Sehar Fatima
sehar.fatima@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
- Methodology | Correlation Between Long-term & Short-term Rating Scales | Jun-22
- Methodology | Rating Modifiers | Jun-22
- Methodology | Non-Banking Finance Companies Rating | Jun-22
Related Research
This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA
PACRA Maintains the Entity's Ratings of Infra Zamin Pakistan Limited
| Rating Type | Entity | |
|
Current (02-May-23 ) |
Previous (02-May-22 ) |
|
| Action | Maintain | Maintain |
| Long Term | AAA | AAA |
| Short Term | A1+ | A1+ |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
Infra Zamin Pakistan Limited (IZP) is a recent initiative of the Private Infrastructure Development Group (PIDG). PIDG through group companies (InfraCo Asia Investments/ Indus Guarantees and GuarantCo) has partnered with Karandaaz for taking this initiative forward. The shareholding structure plays a pivotal role in the assignment of the rating. Developed by GuarantCo, IZP is to function as a for-profit credit enhancement facility. GuarantCo, rated AAA by PACRA, was established in 2005 and executed its first deal in Pakistan in 2013. The contextual experience of the local market dynamics will lend support to IZP. The business model envisages greater participation of the private sector needed for uplifting the infrastructure of Pakistan. IZP is expected to unlock the hidden potential of the local credit market by way of providing guarantees to reduce the implied credit risk. During FY22, the institution's topline clocked at 499mln, reflecting a significant increase in the net profitability. IZP has developed a decent investment book where the primary contribution is government securities.
The ratings are dependent on the continued support and guidance from the key sponsors. The successful unfolding of the model is of absolute necessity. The Governance and control mechanics are expected to be very strong and gradually mature as the steps toward achieving commencement materialize.
About
the Entity
Infra Zamin Pakistan Limited was incorporated on Mar 30, 2020, as a non-bank financial company ("NBFC") domiciled in Pakistan. IZP is co-owned by Private Infrastructure Development Group (PIDG) company InfraCo Asia Investments via Indus Guarantees (60%) and Karandaaz Pakistan (40%). Shareholders have solemnized a Shareholders' Agreement which will determine their relationship among themselves and to the entity itself.
IZP's Board of Directors currently constitute two Indus nominee including the chairman, one Karandaaz nominee, one GuarantCo nominee, two independent directors, and the CEO. Ms. Maheen Rehman assumed the role of CEO of Infra Zamin Pakistan Limited on 1st Jan' 21. and her appointment as well as that of the Board of Directors has been approved by the Securities and Exchange Commission of Pakistan ( SECP).