Govt raises Rs239.3bn in inaugural Hybrid Sukuk auction

The federal government on Wednesday raised Rs239.325 billion through the inaugural auction of its Short-Term Government of Pakistan (GoP) Hybrid Sukuk, “marking a new milestone in Pakistan’s Islamic capital market”.

The auction was conducted by the Pakistan Stock Exchange (PSX) on behalf of the Ministry of Finance (MoF), said PSX.

According to the auction results, the sale attracted bids worth Rs770.234 billion (face value), equivalent to a realised value of Rs741.287 billion, highlighting strong participation from institutional investors.

The government accepted bids amounting to Rs239.325 billion.

Market participants attributed the strong response to improving liquidity conditions and sustained appetite among institutional investors for Islamic investment avenues, particularly sovereign Sukuk offering diversified return structures.

Islamic financing: First Hybrid Sukuk fetches over Rs109bn

The Hybrid Sukuk, which combines fixed and floating rate features, is designed to broaden the government’s Shariah-compliant borrowing base while providing flexibility to investors with varying risk-return preferences.

According to the auction results, the cut-off yield for the three-month discounted Sukuk stood at 11.4994%, while the six-month discounted Sukuk was priced at 11.6902%.

For the one-year discounted Sukuk, the cut-off yield was set at 11.8400%, representing an increase of 54 basis points over the previous benchmark.

Meanwhile, the 10-year Variable Rental Rate (VRR) Sukuk was priced at 11.5803%, offering a spread of 18.99 basis points over the reference/coupon rate of 11.3904%.

These issuances indicate continued demand for sovereign-backed Islamic instruments and reflect collaborative efforts by the Ministry of Finance, State Bank of Pakistan (SBP), Securities and Exchange Commission of Pakistan (SECP), and capital market infrastructure institutions to strengthen the domestic Sukuk market.