The JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned a medium to long-term entity rating of 'BBB' (Triple B) with a 'stable' outlook and short-term rating of 'A3' (A three) to Invest and Finance Securities Private Limited (IFSL).
The IFSL provides equity brokerage services and online trading facility to clients. During FY06, the company was re-capitalised by way of fresh equity injection by the sponsors. The access to capital markets for equity funds is also likely to be established by the next year. The capitalisation is strong vis-à-vis the scope of operations.
These ratings incorporate the quality of information systems in place. The software solution deployed at IFSL allows real time margin monitoring of clients. Subsequent to the acquisition of a Karachi Stock Exchange seat, operations were set up in Karachi in addition to existing operations in Lahore and the branch network is being expanded to develop a broad base clientele.
The company is working on further developing organisational infrastructure, including induction of personnel at key management positions as the organisation is set to grow. Nevertheless, control functions, including internal audit and risk management require strengthening.
Brokerage revenues have increased during the outgoing financial year. However, with the company's operations currently reliant on actively in equity capital market, revenues may remain volatile. Diversification in business lines can help in sustaining more robust earning base and support ratings, going forward.-PR
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