National Grid Company plans Rs 100 billion sukuk on PSX, first Rs 20 billion tranche, up to 10 years

The National Grid Company of Pakistan (NGC) plans to raise up to Rs 100 billion through a Shariah-compliant sukuk listed on the Pakistan Stock Exchange, starting with a first issue of up to Rs 20 billion. The plan was presented on Friday to the Capital Market Development Council, chaired by Finance Minister Muhammad Aurangzeb, ProPakistani reported.

The sukuk in brief

• Size: up to Rs 100 billion in all
• First tranche: up to Rs 20 billion
• Tenor: up to 10 years
• How: public offerings listed on PSX, in phases
• Condition: subject to regulatory approval and market conditions

No profit rate, rating or offer date has been announced. Listed corporate sukuk are usually priced as a margin over KIBOR, so the 12-month KIBOR is the number to watch when terms are set.

Aurangzeb welcomed the plan as a way to show that listed debt can work for large borrowers and to bring other companies to the market for long-term money instead of relying only on bank loans.

Why it matters

Pakistan's corporate debt market has been growing from a small base, and a Rs 100 billion programme from one state-owned company would be among the largest listed issues. Figures shared with the council:

The SECP told the council it had consulted 17 pension fund managers and 44 insurance companies on why they hold so little corporate debt. Their answers covered a shortage of suitable products, thin secondary-market trading and disclosure by issuers. SECP and PSX have set up corporate debt desks and a one-window listing route, and work is under way to bring the Central Depository Company into it.

The minister also asked SECP and PSX to work on capital market financing for small and medium businesses and to re-engage with MSCI on Pakistan's possible return to Emerging Markets status.

What it means for you

A listed sukuk can be bought through a stockbroker in the same account you use for shares, often in small amounts during a public offer. If you want a fixed-income comparison in the meantime, our National Savings calculator shows what the government's own schemes pay, and the KSE-100 page tracks the stock market.

We will add the profit rate and subscription dates when the prospectus is published.