Karachi: The Pakistan Credit Rating Agency Limited (PACRA) has placed NIMIR Industrial Chemicals Limited (NICL) on Rating Watch, while maintaining the company's existing entity ratings. This development follows a Share Purchase Agreement between NICL’s majority shareholders and Cherat Cement Company Limited, which involves the sale of a 51 percent stake in NICL. The transaction is pending regulatory approval and fulfillment of conditions precedent.

According to The Pakistan Credit Rating Agency Limited, NICL operates in Pakistan's chemical industry, producing oleochemicals and chlor-alkali products and offering toll manufacturing services. The company has maintained a strong market presence despite mixed demand conditions in the chemical sector. NICL's Hub, Balochistan facility, acquired from Procter & Gamble Pakistan, has increased its installed capacity for soap noodles, which is expected to bolster third-party manufacturing and revenue.

Despite challenges in the chlor-alkali segment, NICL recorded a 6.7 percent increase in net revenue for FY26, reaching approximately PKR 48,291 million. The company's gross margin improved to approximately 15.7 percent, aided by cost discipline and an efficient pricing strategy. NICL's financial risk profile shows improved coverages, supported by free cash flow and declining finance costs, although working capital cycles have lengthened due to extended receivable collection periods.

PACRA's decision to place NICL on Rating Watch is based on the uncertainty surrounding the anticipated change in ownership. The agency plans to monitor the situation closely, with the rating implications to be clarified upon completion of the ownership transaction. The continuation of NICL's revenue growth, margin improvement, and effective working capital management will remain critical factors for its ratings going forward.