Select Technologies Private Limited has secured Rs2.0 billion through a short-term Sukuk issuance amid challenging industry conditions, including a downturn in the local mobile assembly sector and moderated demand from its principal, Xiaomi Pakistan.
The smartphone assembler, a wholly-owned subsidiary of Air Link Communication Limited, issued its third Rated, Secured, Privately Placed, Short-Term Sukuk on October 28th, 2025. The funds have been raised as bridge financing for immediate capital expenditure ahead of a planned syndicated long-term facility, according to a report from The Pakistan Credit Rating Agency (PACRA) issued on Monday.
The debt issuance comes as the broader Pakistani mobile assembly market experiences a slowdown. Statistics from the PTA for the first eleven months of calendar year 2025 show a marginal year-on-year decline of approximately 4.1% in local mobile assembly, down to 27.6 million units. The market remains skewed towards lower-value products, with 2G devices accounting for around 47% of total output, which constrains industry margins and technological advancement.
Mirroring this trend, Select Technologies experienced a fall in production and a reduced market share among leading brands due to decreased orders from its primary partner.
Despite the market pressures, the firm”s standalone financial performance showed significant improvement in the first quarter of the 2026 fiscal year. Quarter-on-quarter net sales rose to approximately PKR 11,332 million, largely driven by improved pricing. Margins also strengthened, supported by lower cost of goods sold, enhanced operational efficiency, and higher non-core income.
The strategic fundraising supports the expansion ambitions of the parent company, Airlink, which recently announced on the Pakistan Stock Exchange the incorporation of another wholly-owned subsidiary. This new entity will manage the manufacturing, distribution, and retail of an expanded portfolio including laptops, electronics, and home appliances from additional brands.
To mitigate financial risk associated with the new debt, the Sukuk is secured by a ranking charge over the company’s current assets. While its leverage appears high in absolute terms, PACRA notes it falls within a manageable range when netted against cash and guarantee margins. The issuer has also committed to keeping PKR 2,100 million in working capital facilities unutilised throughout the Sukuk”s tenor as a repayment back-up, a limit that PACRA will monitor on a weekly basis.
The credit rating for the instrument is contingent upon the company’s ability to sustain its market position and its business partnership with its global brand partner. Continued adherence to financial covenants, particularly maintaining sufficient cash flow to meet debt obligations and managing leverage, will remain critical.