JCR-VIS assigns final rating to the Sukuk issue of Agha Steel Industries Ltd

KARACHI: Upon review of the signed legal documents, JCR-VIS Credit Rating Company Limited has finalized rating of single A plus to the Sukuk issue of Rs 5 billion (inclusive of a Green Shoe Option of Rs 1 billion of Agha Steel Industries Limited. The outlook on the assigned rating is stable.

JCR-VIS has assigned an entity rating of A/A-1 to ASIL, said a press release on Monday.

The assigned ratings incorporate ASIL’s position as a top-tier player in the long steel sector enjoying strong brand name and recognition, healthy financial risk profile and strong debt servicing mechanism for the Sukuk.

The ratings also reflect high business risk profile of the sector as evident from expected increase in competition post capacity expansion by established existing and new players, significant reliance of the sector on duty protection, cyclical nature of the industry and significant rupee depreciation resulting in higher working capital requirements.

However, these factors are partially mitigated by healthy demand outlook due to ongoing construction activities and demand from large infrastructure projects.