Analyst
Madiha Sohail
madiha.sohail@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
PACRA Maintains Asset Manager Rating of First Capital Investments Limited
Rating Type | Asset Manager | |
Current (03-Apr-24 ) |
Previous (05-Apr-23 ) |
|
Action | Maintain | Maintain |
AM Rating | AM4++ | AM4++ |
Outlook | Stable | Stable |
Rating Watch | - | - |
The rating reflects the Company's modest market share, adequate organizational structure, and limited fund slate comprising a single fund. The Company has a stable core management team, which provides support to the rating. The Company's AUMs stood at PKR 126mln at the end of Dec'23 (FY23: PKR 91mln; 6MFY23: PKR 92mln); the expansion is attributable to an increase in NAV by ~20% since Jun’23. The Fund beat the industry benchmark and gave an annualized return of 43.9% as of CY23. The rating is constrained by a relatively small market share of ~0.01% and a high concentration in the investor base. Top 10 investors constitute ~91% of total AUMs. The related party concentration is ~75% of the total investors, reducing the redemption pressure. The Company has reported a net profit of PKR ~22mln during 6MCY23 (FY23: PKR -0.41mln; 6MFY23: PKR -0.1mln). The profitability of AMC is primarily due to revaluation gains on investments. Due to the improvement in stock market performance, the equity of the Company shows the elevation and it stood at PKR ~223mln at the end of CY23 (FY23: PKR ~201mln, 6MFY23: PKR ~201mln). Going forward, the Company has also planned for expansion of revenue streams.
The rating is dependent on sustainable cash flows and profits which would ultimately results in stable equity. The Company’s ability to successfully execute its business strategy and achieve optimal utilization of its resources while leveraging group synergies remains imperative. Meanwhile, improving market share, maintaining strong fund performance, strengthening of core process and meeting the regulatory thresholds would remain critical.
About
the Entity
First Capital Investments Limited or the 'Company' or 'FCIL' was registered as a Private Limited by shares, incorporated under the Companies Act, 2017 ("the Act"), on October 27, 1994. FCIL has commenced operations in 1995. The Company is sponsored by First Capital Securities Corporation Limited (FCSC) the holding company of First Capital group with 78.85% shareholding. Mr. Sulaiman Ahmed Said AlHoqani - An Omani Investor - holds a strategic stake of 9.2% in FCIL and major shareholding in FCSC. FCIL is currently managing one open-end, equity fund namely First Capital Mutual Fund (FCMF) with assets under management of PKR 126mln at end of CY23. The Board of Directors comprises four members, including the CEO Mr. Imran Hafeez. The remaining three members including the chairman, are non-executive, and heads the Investment, HR and Audit Committees.