Karachi, VIS Credit Rating Company Limited (VIS) has assigned an initial entity rating of 'A-/A-1' to Maple Leaf Capital Limited (MLCL), indicating good credit quality and high certainty of timely payments, with a stable outlook, a news release by VIS Credit Rating Company Limited. These ratings reflect a balance between strong liquidity factors and the inherent market risks associated with equity investment.
According to VIS Credit Rating Company Limited, Established in 2014 as a subsidiary of Kohinoor Textile Mills Limited (KTML), which holds an 82.92% equity stake, MLCL is part of the Kohinoor Maple Leaf Group. The group has a diversified presence across sectors such as cement, textiles, power, and capital markets. MLCL's primary function is to manage investments in financial instruments and commodities for the group. The shareholding is split between KTML and members of the sponsoring group, who are actively involved in the company's operations. The Board of Directors comprises seven members, including the Chairman and CEO, with the rest serving as non-executive directors. The senior management team, noted for its stability, includes professionals experienced in business, risk management, financial planning, equity management, and equity investment.
MLCL's investment strategy is governed by an investment policy statement (IPS) and is overseen by the Investment Committee. The company aims to generate income through capital gains, dividends, and interest income from a diversified asset portfolio. Over 90% of MLCL's assets are in short-term investments, with long-term investments primarily in startup companies, especially in e-commerce and technology solutions. However, as of June 30, 2023, market risk was high due to sector and script-level concentration in the portfolio. Despite challenges in FY22, including macroeconomic issues and political instability, MLCL saw a recovery in FY23, with portfolio returns outperforming the benchmark KIBOR rate. Post-June 2023, the company embarked on a diversification strategy to mitigate market risk and boost profitability, focusing on dividend-yielding stocks. With the KSE-100 index showing positive trends, MLCL anticipates improved profitability. The company maintains a strong liquidity position, sound capitalization, and prudent leverage, supported by the commitment of group companies to provide funds for investment operations. However, the ratings are tempered by the inherent risks of equity investment and market volatility in an emerging stock exchange market. The ratings hinge on the successful diversification of market risk and a focus on dividend yields while maintaining capitalization indicators.
For more information on this rating announcement, inquiries can be directed to Ms. Tayyaba Ijaz, CFA, at 042-35723411-12 (Ext. 8005) or the undersigned at 021-35311861-64 (Ext. 207), or by email at firstname.lastname@example.org.