Lahore, December 21, 2020 (PPI-OT): IGI Holdings Limited (“IGI Holdings” or “the Company”) emerged as a new entrant in the growing holding companies sector post restructuring of IGI Insurance Limited in 2017, consolidating Packages Group investments in financial sector i.e. Life and Non-life Insurance, Brokerage and investment holding company. The ratings reflect IGI Holdings strong standing as a HoldCo. with its key underlying businesses performing well in their respective sectors, providing a steady stream of dividends. IGI Investments, the investment arm of the group, has a sizable investment portfolio comprising strong players mainly financed through equity.
IGI General Insurance has shown growth in business volumes as well as profitability, while IGI Life is pursuing it’s growth strategy through market penetration and new products. The dividend flow from IGI Investments, a dominant contributor, remained low in 3QCY20 owing to general economic conditions on the underlying investments. This impacted the revenue of IGI Holdings.
Meanwhile, the Company’s subsidiary i.e. IGI Investments – completed its equity injection for acquiring 45% stake in S.C Johnson and Sons of Pakistan (Pvt.) Limited during the last quarter of 2020. The financial profile of the Company remains robust with low leveraged capital structure, strong coverage and adequate cushion in financing facilities. Going forward, dividend income from the subsidiaries is expected to remain sustained in the current economic environment.
The Company has a strong governance framework. The system and controls to monitor investments and making key strategic investments are evolving. Ratings depend upon sustained performance of existing strategic investments. Formalizing a strong and effective mechanism for monitoring performance and providing holistic direction to it’s subsidiaries would bode well for the ratings.
For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com
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