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PACRA Maintains Entity Ratings of Fazal Holdings (Pvt.) Limited

Rating Type Entity
(22-Nov-21 )
(24-Nov-20 )
Action Maintain Maintain
Long Term A A
Short Term A1 A1
Outlook Stable Stable
Rating Watch - -

Fazal Holdings (Pvt.) Limited ('Fazal Holdings' or 'the Company') is a holding company for Fazal Group (The term ‘Group’ may be defined differently in Prudential Regulations for Corporate/Commercial Banking and/or other laws). Its investment portfolio comprises a combination of strategic investments (long-term investments in subsidiaries and associates) and a trading portfolio (with short to medium-term time horizon). The ratings reflect the diverse nature and profitability of the strategic portfolio and strong support from sponsors. Trading portfolio comprises listed scrips spread across diverse sectors of the economy. Fazal Holdings drives its revenue mainly from dividend income and capital gains, along with a share of profit from associates. The dividend stream witnessed improvement during FY21 owing to the recovery of the economy post the pandemic effects. Strong financial performance of associated concerns led to an improved share of profit. The recent upturn in the stock market led to capital gains and the Company was able to substantial net income, compared to a net loss in the preceding year. The Company has designed a conservative investment policy in accordance with the Company's equity. This helps the Company to absorb the effects of volatility in the 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 decision making process and performance monitoring mechanism of underlying portfolio. This would facilitate Fazal Holdings assimilation into an effective holding company. At the same time, adhering to agreed financial matrix and keeping debt coverages at adequate level remains critical.

About the Entity
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.
Mr. Rehman Naseem holds 49% of the shareholding followed by Mr. Yousaf Aamir and Mr. Abdullah Aamir (Sons of Mr. Aamir Naseem) holding 22% each. While, remaining shareholding resides with Mr. Sheikh Naseem.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.