LAHORE: Masood Spinning Mills Limited (MSML), a significant entity in the textile sector under the Mahmood Group, has received preliminary ratings for its planned sukuk issuance, valued at PKR 3.0 billion, from PACRA. The company has expanded its operations into the socks segment, offering a range of products to leverage the rising demand for value-added items in international markets.

According to The Pakistan Credit Rating Agency Limited, MSML achieved a topline of PKR 8.1 billion in the first quarter of the fiscal year 2026, an increase from PKR 6.7 billion in the same period the previous year. This was attributed to a strategic shift by the management to focus on core profitability over volume-driven growth. The company emphasized its domestic market presence while maintaining its international standing through its socks segment. Despite a moderation in net profitability due to taxation, the company reported a profit after tax of PKR 94 million, up from PKR 52 million.

MSML has access to significant working capital facilities, which remain available according to management. The sukuk issuance aims to diversify and strengthen the company's funding base. Preliminary ratings highlight the security structure of the sukuk, secured by a ranking charge over current assets and supplemented by additional covenants. The Debt Payment Account mechanism ensures the availability of funds prior to the maturity date, with both principal and profit set for a bullet repayment. The company is required to maintain a cushion in current assets and ensure that bank limits equivalent to the sukuk remain unutilized throughout its tenor.

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