PACRA maintains Broker Management Rating of IGI Finex Securities Limited

IGI Finex Securities Limited ('IGI' or the 'Company') has a sustained position in the brokerage space. Since October 2023, the PSX volumes have picked up with the index reaching historic highs due to renewed investor interest and improving macro-economic indicators. Thus, the brokerage industry experienced enhanced toplines and profitability during FY24. Continued investor interest remains dependent on further improvement in macro-economic indicators and stability on the political front during FY25. The ratings incorporate the business acumen and financial strength of the sponsoring group. The assigned rating takes into account a sound ownership structure. The governance structure is considered adequate with the presence of two non-executive directors and board-level committees well-noted. Inclusion of an independent director would strengthen the governance framework further. The ratings signify a strong internal control framework supported by an outsourced internal audit function, a dedicated risk and compliance department, and the presence of all requisite policies and manuals. A qualified and experienced management team is present to ensure smooth operations, with a well-defined organizational structure in place. IGI provides its clients with research, online trading, and online complaint facilities. IGI does not partake in proprietary trading, thus exposure to market risk is limited. The Company aims to further solidify its presence in the market by focusing on the untapped retail segment. The topline of IGI is concentrated to equity brokerage and financial income on saving deposits. The Company earned brokerage revenue of ~PKR 49mln during 1QCY24 (SPLY: ~PKR 21mln), wherein the incline is in-line with the pick in market volumes. IGI supported its operations through interest income earned on savings account of ~PKR 96mln to generate a profit of ~PKR 70mln during 1QCY24 (SPLY: ~PKR 0.045mln). The Company's equity base stood at ~PKR 696mln at end-Mar'24 with a Liquid Capital Balance of ~PKR 512mln.
Moving forward, improvement and diversification in core income, sustainability of market share and profitability, and materialization of planned business strategies remain critical. Meanwhile, upholding strong internal controls, sound governance structure, retention of key management personnel, and diligent monitoring of risks is important.

About the Entity
IGI Finex Securities Limited is a wholly owned subsidiary of IGI Holdings Limited. IGI Holdings Limited is an investment holding company listed on PSX with strategic investments mainly in the financial sector. IGI Holdings Limited has four subsidiaries namely IGI Life Insurance (82.7%), IGI General Insurance (100%), IGI Investments (100%), and IGI Finex Securities Limited (100%). Major ownership of IGI Holdings (~72%) vests with Packages Group through sponsors (~32%) and associated entities (~40%). IGI Holdings and Packages Group which falls under the umbrella of "Ali Group" are ranked amongst the leading industrial groups of the Country with diversified interests in paper and paperboard, packaging, financial institutions, food, personal care, and real estate sectors. Strong affiliation and technical track record with international JV's have added to the success of companies within the Group. The CEO, Mr. Syed Raza Hussain Rizvi brings across over nineteen years of diversified experience in the fields of Management, Corporate Strategy, Business Development, Mergers & Acquisitions, and Capital Markets.