Select Technologies Launches PKR 3.5 Billion Sukuk Amid Shifting Market Dynamics

Lahore: Select Technologies Pvt. Limited, a subsidiary of Air Link Communication Limited, is set to issue its fourth Rated, Secured, Privately Placed, Short-Term Sukuk-IV, valued at PKR 3.5 billion. The issuance comes as the company navigates a complex market environment marked by changing consumer preferences and fluctuating demand in the local mobile assembly sector.

The sukuk is secured by a ranking charge over the company’s current assets. To ensure repayment, Select Technologies will maintain a Debt Payment Account under the Investment Agent’s lien. The redemption is scheduled in three equal installments, beginning four months after the issue date.

Select Technologies has established itself in Pakistan’s technology sector by manufacturing and selling smartphones and accessories. A significant partnership with Xiaomi Corp. in 2022 facilitated the creation of a modern assembly line in Lahore. However, recent statistics from the Pakistan Telecommunication Authority indicate a ~4% decline in local mobile assembly, reflecting broader industry challenges.

Despite these challenges, Select Technologies reported improved performance in the first quarter of fiscal year 2026, with net sales reaching approximately PKR 11,332 million. This improvement was attributed to better pricing, lower costs, and operational efficiencies.

The company’s parent, Air Link Communication, has announced the incorporation of another subsidiary to handle a broader range of technology products. Select Technologies’ financial profile shows an adequate working capital cycle and a leveraged capital structure, relying on short-term borrowings for importing mobile parts.

The Pakistan Credit Rating Agency Limited emphasized that the company’s ability to maintain its market position and business partnership with Xiaomi is crucial. Adherence to financial covenants, such as maintaining free cash flow coverage and desired leverage levels, will remain vital for sustaining its credit rating.