PACRA Maintains the Rating of TPL Trakker Limited | Sukuk

TPL Trakker Limited (or the "Company") is a leading provider of GPS, GSM, and satellite-based asset tracking and information solutions. The assigned rating reflects its dominant industry position, driven by a diversified product suite and advanced technological infrastructure. Leveraging expertise in digital mapping and IoT integration, the Company targets high-growth segments with innovative solutions and strategic partnerships. The Company's emphasis on cutting-edge analytics and market expansion in the IoT space drives sustainable growth and strengthens its competitive position in the evolving digital landscape, positively supporting the assigned rating. In FY24, the Company launched Pakistan's first native navigation app, covering over 380 cities, and introduced the "Network Planning" platform to assist businesses in optimizing their network infrastructure. With the recent decline in interest rates and a surge in motor vehicle production, the Company foresees an uptick in demand within the telematics sector. During FY24, the Company reported an increase in topline of ~13% standing at PKR ~2.543bln (FY23: PKR ~2.253bln) in which ~58% of the revenue comes from the rental of tracking devices followed by monitoring income whereas at the end of 1QFY25, topline stood at PKR 557mln. The Company's profit rose to approximately PKR 135mln in FY24 (FY23: PKR -42mln), driven by higher topline revenue and lower finance costs. In 1QFY25, profit reached PKR 23mln. As of September 2024, the Company’s equity stood at PKR 2.5bln (FY23: PKR 2.4bln). The Company is devoted to make a lasting impact through initiatives in healthcare, education, and gender equality by supporting non-profit organizations and educational institutes in Pakistan.
The ratings are dependent upon the instrument's tiered security structure and a pre-default mechanism, including a facility payment and reserve account holding one installment.

About the Entity
TPL Trakker Limited is a publicly listed Company that is majorly (64.32%) owned by TPL Corp Limited. The Company is a telematics solution provider and the core business mainly comprises vehicle tracking, fleet management, Internet of Things (IoT), and Digital mapping services. The BoD of the Company comprises eight members, headed by the Chairperson Mr. Jameel Yusuf. Mr. Amjad Waqar appointed as CEO of the Company on June, 30 2024, having more than two decades of experience.

About the Instrument
TPL Trakker Limited has issued a secured, OTC-listed, and privately placed Sukuk ("Sukuk") of the amount PKR 1.25bln in March 2021. The Sukuk carried a profit rate of 3MK+300bps with a tenor of five (5) years. The purpose of the Sukuk is to meet the Company's working capital requirement, investment in group companies, and partial debt repayment. The Sukuk's capital structure includes a Facility Payment Account (FPA) and a Facility Reserve Account (FSRA), maintained with the account bank. The FPA is built monthly by depositing 1/3rd of the installment (principal + interest), ensuring the full upcoming installment is deposited three days before its due date. The FSRA maintains one full installment (principal + interest) throughout the Sukuk's tenure. As per client representation, the required amounts are maintained in both accounts. By the end of September 2024, twelve principal installments totaling PKR 833mln out of PKR 1,250mln have been successfully paid. The most recent payment, comprising PKR ~69.4mln in principal and PKR ~28.5mln in markup, was made at the end of September 2024.