ENGRO RUPIYA CERTIFICATE: Transaction of the year 2010

Engro Rupiya Certificate (ERC) has been acknowledged as the "Transaction of the year 2010" by the CFA Association of Pakistan. The CFA Association recognised ERC as being a landmark transaction in Pakistan, recognising innovativeness of its offering to cater to customer needs, widespread distribution network and most importantly the kind of positive buy-in from Pakistani investors.
The product was launched in October 2010 and was the first Retail Corporate Debt issue in Pakistan. The tremendous success of Engro Rupiya Certificate has helped in developing the Retail Corporate Debt market in Pakistan which should improve investment avenues for Retail investors while providing Corporates with an alternate source of raising funds.
Innovativeness in Structure - The product was structured to provide the average Pakistani an investment vehicle that offered superior returns, convenient subscription, ease of encashment, and security of principal. Since the concept of retail corporate bond was relatively new in Pakistan, an extensive marketing campaign was developed to create product awareness across the country covering Television, Print, Outdoor, Radio, Call Center and Internet to reach out to the target investor base. A customised Profit Calculator was programmed on the website to help investor's calculate their earnings & plan their spending.
Benefit to Retail Customers - ERC benefited the general public as individual investors were able to get much higher returns than what are available from banks and NSS (14.5% p.a. in ERC vs. avg. of 12.5% and 11.5% from NSS and Banks respectively). Moreover, it offered ease of subscription through doorstep pick up of application, convenience in profit payment through option of direct transfer to Bank account, early encashment option and six monthly profit payments ensuring maximum convenience to investors.
Size of the Transaction - The total issue size of ERC was Rs 4 bn with target amount of Rs 2 bn and a green shoe option amount of another Rs 2 bn. Although the official subscription period was 3 months, the total issue size was met much earlier with the target amount being met in the very first month of subscription. NSS, with its long history, highest security, and a sizeable portfolio of Rs 368 bn in the equivalent 3 year category, had an average monthly net inflow of Rs 2.5 bn during that period that suggests ERC's success in terms of the size of the transaction.
Width of Distribution - Engro Corporation partnered with a host of financial institutions including 11 banks and 4 fund distribution companies to make the product available at 2,200 locations across the country. To provide added convenience and ensure coverage in remote areas, TCS was appointed as the courier service partner to collect applications right from the customer's doorstep. A dedicated Call Center (021-111787492) serviced all such requests throughout the subscription period. A website (www.engrorupiya.com) was also developed to facilitate potential investors.
Launch of Second Issue
Following enthusiastic interest of investors, Engro Corporation has launched the second issue of Engro Rupiya Certificate in June 2011 with a subscription for a period of three months, ending August 31, 2011.
The second release of Engro Rupiya Certificates also offers profit payments twice a year for a minimum amount of PKR 25,000, invested for a period of 3 years. ERC offers investors the highest rate of fixed return of 14.5% per annum over a 3 year period while giving them the option to encash certificates at any time, with the profit accumulated from the date of purchase to the date of encashment.