PACRA Maintains Entity Ratings of Fazal Holdngs (Pvt.) Limited
Fazal Holdings (Pvt.) Limited ('Fazal Holdings' or 'the Company') is holding company for Fazal Group. It's investment portfolio comprises a combination of strategic investments (long-term investments in subsidiaries and associates) and trading portfolio (with short to medium term time horizon). The ratings reflect conservative investment policy (minimal trading activity), diverse nature and profitability of strategic portfolio and strong support from sponsors. Trading portfolio comprises a combination of blue chip companies spread across diverse sectors of the economy. Fazal Holdings drives its revenue mainly from dividend income and capital gains. The dividend stream was impacted due to recent downturn in capital markets and the incurred capital losses. This led to suppressed earnings and net loss for FY19. However, the recent upturn in stock market should improve valuations. The Company has designed a conservative investment policy accordance with the Company's equity. This should help absorb the effects of volatility in stock market to an extent and keep financial risk manageable. Investment decisions are mainly led by Mr. Rehman Naseem with assistance from resources within Fazal Group and certain research/brokerage houses. Herein, institutionalization of investment policies would be beneficial. Continued sponsor support remains a key rating factor.
Ratings are dependent on the management's initiative to strengthen investment making and performance monitoring mechanism of underlying portfolio. This would facilitate Fazal Holdings assimilation into an effective holding company. Prolonged downturn in the capital market and/or material performance weakening of investee companies would have a negative impact on the ratings. At the same time, adhering to agreed financial matrix and keeping debt coverages at adequate level remains critical.
Fazal Holdings is a private limited company and is engaged in making short term investments in quoted and un-quoted securities (trading portfolio), long term (strategic) investments) and purchasing investment property for agricultural and rental purposes. The Company was established in April, 1995 with the name of Amir Fine Exports (Private) Limited and was engaged in the trading of yarn, cloth and securities. In 2016, the Company’s name was changed to Fazal Holdings (Pvt.) Limited and it's operations were limited to investing and trading in quoted and unquoted securities.
Mr. Rehman Naseem holds 49% of the shareholding followed by Mr. Yousaf Amir and Mr. Abdullah Amir (Sons of Mr. Amir Naseem) holding 22% each. Remaining 7% shareholding is held by other members of Fazal Family.