PACRA Assigns Preliminary Rating to Zarea Limited - PPSTS-II - PKR 2.0 bln - TBI

Zarea Limited ('ZAL' or the 'Company') is a tech-enabled B2B e-commerce platform digitizing Pakistan's industrial and agricultural supply chains, with 22,000+ orders across 50+ cities and offtake agreements with blue-chip corporates, backed by agile architecture, real-time tracking, and a proprietary 10-year commodity data repository. ZAL is also the country's first structured entrant in the agri-biomass segment, positioning it to capture a rapidly formalizing market. Governance is anchored by a seven-member board and complemented by professionals with deep experience in government, banking, and industry. Institutionalized oversight across finance, technology, supply chain, and marketing enhances execution capacity. Financially, ZAL has exhibited sound growth, with revenues rising ~162% YoY to PKR 2,108 million and net profit up ~82% to PKR 826 million (9MFY26). The Company maintains an equity of PKR 2.84 billion. Its 10-year STZA tax exemption further strengthens cash flow and interest coverage. ZAL has met the majority of its working capital requirements through internal cash generation, supplemented in the period by its first short-term Sukuk issuance, which matured and was fully repaid, principal and profit, on July 23, 2026. This clean repayment through the Sukuk Payment Account mechanism is the Company's first completed capital-markets debt cycle and supports its credibility as a repeat issuer. In order to support scale-up and diversification, the Company plans to issue a second privately placed, rated, unsecured short-term Sukuk, structured under Wakala-tul-Istithmar. The instrument benefits from adequate structural protections. Under the structure, the Company acts as agent (Wakeel) deploying Sukuk proceeds on behalf of investors into the underlying commercial venture. Proceeds are contractually earmarked for working capital deployment in agri-biomass and grains procurement, specifically corn cob, paddy, corn grain and sesame straw, across 10 to 12 hubs. Importantly, feedstock procurement is aligned with prevailing industry demand and supported by historical offtake patterns with established corporates, including textile, rice, and animal feed processors. This demand-driven approach enables multiple procurement-sale cycles within the instrument's life, enhancing cash flow visibility. The rating also factors in a dedicated Sukuk Payment Account requiring equal weekly principal pre-deposits ahead of maturity. Given the higher issue size relative to the first Sukuk, the instrument's proportion to the Company's total deployment in self-liquidating working capital assets remains a key monitorable.
Compliance with the structure of the instrument including filling the SPA in a timely manner is integral to the rating.

About the Entity
ZAL, formerly Vision 2A (Pvt.) Limited, was founded in September 2020, rebranded in August 2022, and became a public limited company on April 15, 2024, headquartered at NASTP, Lahore Cantt. Founder and CEO Mr. Ali Alam Qamar holds ~41.5% directly and ~34.3% via Goldfinger Private Limited.

About the Instrument
ZAL plans to issue its second rated Sukuk, a Shariah-compliant, privately placed, unsecured, short-term facility structured under Wakala-tul-Istithmar, with an issue size of up to PKR 2,000 million, inclusive of a green shoe option of PKR 1,000 million. The tenor is up to six months from the Issue Date, with the profit rate referenced to six-month KIBOR plus 250 basis points. Profit and principal are scheduled for realization in a single settlement at maturity. Structural protections include a Sukuk Payment Account, requiring staged pre-funding of principal in four equal weekly tranches prior to maturity, with the first three tranches comprising only principal and the final tranche covering both principal and profit payments.