PACRA Assigns the Initial Ratings to Select Technologies (Pvt.) Limited - PPSTS-IV - PKR 3.5bln - Dec-25

Select Technologies Pvt. Limited (hereafter referred to as ‘SELECT’ or ‘the Company’) has issued its fourth Rated, Secured, Privately Placed, Short-Term Sukuk-IV on December 18th, 2025, valued at PKR 3.5 billion. The underlying instrument is secured by a ranking charge over the Company’s current assets. To ensure repayment discipline, the Issuer shall maintain a Debt Payment Account (“DPA”) under the Investment Agent’s lien to ensure repayment discipline. The Issue will be redeemed in three (3) equal installments of one-third (1/3) each of the Issue Amount, starting at the end of the 4th month from the Issue Date, with each installment deposited into the DPA at least three days before its respective redemption date. SELECT is a wholly owned subsidiary of Air Link Communication Limited (AIRLINK). The Company specializes in manufacturing, assembling, and selling smartphones and related accessories in Pakistan under Xiaomi brand. SELECT has established itself as a key player in Pakistan’s technology sector, backed by a sustainable business model and strong support from its parent company. The Company has a state-of-the-art assembly line in Lahore, with a current capacity of 2.7mln units per annum in a single shift for Xiaomi handsets assembly. Xiaomi remains one of the world’s leading smartphone manufacturers, known for delivering high-quality products at competitive prices. As of Sep’25 (Q3), Xiaomi maintained its global smartphone market share at ~13.6% in one quarter. During CY25, the Pakistan Telecommunication Authority’s (PTA) latest statistics reflect a marginal ~3.7% decline in local mobile assembly, with total volumes at 30.21mln units. By the end of 2025, Infinix is leading the market with ~12.1% share, followed by VGO TEL (~11.8%), and Vivo (~9.3%). In Contrast, Xiaomi’s market share reduced to ~4.6% share in CY25 compared to ~7.5% in CY24. This decline is primarily attributed to a combination of higher taxes imposition and aggressive pricing strategies of the current leaders, who have successfully captured the budget-to-midrange segment. Nonetheless, SELECT’s standalone performance improved QoQ, with net sales reaching to ~PKR 11,332mln in 1QFY26. Margins also strengthened across all levels, supported by lower COGS, enhanced operational efficiency, and higher non-core income. Furthermore, the parent company announced on PSX, SELECT has entered into a strategic partnership with a leading global consumer electronics brand, for the manufacturing and distribution of home appliances in Pakistan, including Smart TVs and Air Conditioners. This alliance is expected to strengthen local manufacturing, enhance product availability, and offer high-quality home appliances tailored to local consumer needs. The Company’s financial risk profile is characterized by an adequate working capital cycle, coverage ratios, and cash flows. SELECT operates with a leveraged capital structure, primarily relying on short-term borrowings to fulfill the cash margin requirements for opening LCs for the import of mobile parts and components.
The rating depends on the Company’s ability to sustain its relative position amidst a changing industry environment and its sustainable business partnership with a global brand. Continued adherence to agreed financial covenants, particularly maintaining full coverage of free cash flows from operations (FCFO) to gross sukuk obligations and preserving the desired level of leverage, will remain critical.

About the Entity
Select Technologies (Pvt.) Limited was incorporated in Pakistan on October 13th, 2021, as a private limited entity. The Company’s ~99.9% financial stake rests with AIRLINK (parent company).

About the Instrument
Currently, SELECT’s PPSTS-III of PKR 2.0bln is the available sukuk in the market. The PPSTS-IV carries a markup of 6MK+1.20% with a tenure of six (6) months, and will be redeemed in bullet at the expiry of Tenor. Additionally, the Company has also included a corporate guarantee of its parent company (AIRLINK) as a security, which will be equivalent to the outstanding issue size plus any accrued mark up during the tenor of the Issue.