Karachi, January 11, 2022 (PPI-OT):VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of ‘AA/A-1’ (Double A/A-One) to Shirazi Investments (Private) Limited (SIL). The medium to long-term rating of ‘AA’ signifies high credit quality; protection factors are strong. Short-term rating of ‘A-1’ denotes high certainty of timely payment, liquidity factors are excellent and supported by good fundamental protection factors. Outlook on the assigned ratings is ‘Stable’.
Shirazi Investments (Private) Limited (SIL) is the holding company for ‘Atlas Group’ which is one of the top ten business groups in Pakistan and has a long-established history of nearly six decades with a cumulative annual turnover of approximately Rs. 300b. The holding company has a diversified business profile with investments in various sectors including manufacturing, power generation, trading and financial services. Shareholding of SIL is vested among members of the Shirazi Family.
The Company’s long-term strategic investment portfolio represents around three-fourth of total asset base, comprising investments in 13 subsidiaries/sub-Subsidiaries and 4 associates. Around 80% of the portfolio is represented by 2 subsidiaries (Atlas Power Limited and Atlas Honda Limited) and 1 associate company (Honda Atlas Cars). SIL is also actively involved in trading of and investments in equity securities and maintains a sizeable proprietary book. Managing of portfolio concentration going forward would be important from the rating perspective.
Assigned ratings incorporate SIL’s strong balance sheet and capitalization levels, sound group level governance structure and healthy income generation capability with two major revenue streams; dividends and rental income. Overall dividend income remained impacted during the period FY19 and FY20 given less or no dividend contribution from some subsidiary/associate investments due to their cyclical nature of business and dividend conservation policy of the sponsors.
Nevertheless, in the outgoing fiscal year, dividend inflows registered a strong growth of ~43%. Rental income has also depicted volatility on a timeline basis. Going forward, the management expects healthy growth in earning profile on account of envisaged future business plans in real estate and warehousing segment. The assigned ratings are underpinned by the strong capitalization and earing profile of SIL and its continuation and strengthening going forward.
For more information, contact:
Director Compliance and Rating Analytics,
VIS Credit Rating Company Limited
VIS House, 128/C, 25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi, Pakistan
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: bilal@jcrvis.com.pk
Website: https://www.vis.com.pk/