The Government of Pakistan raised a combined Rs170.976 billion in face value through its latest Government of Pakistan Hybrid Sukuk auction conducted through the Pakistan Stock Exchange Auction System, significantly exceeding the combined pre-auction target of Rs125 billion. The auction covered two separate categories of Shariah compliant government securities, comprising fresh issues of three-month, six-month and one-year Fixed Rate Discounted Government Hybrid Sukuk and the first reopening of a 10-year Variable Rental Rate Government Hybrid Sukuk originally issued on July 23, 2026. The strong participation across both short-term and long-term instruments resulted in total acceptance well above the government’s initial funding target. The fixed-rate discounted portion alone attracted total face value bids of Rs344.912 billion against a pre-auction target of Rs75 billion, while the 10-year Variable Rental Rate instrument received another Rs412.020 billion in bids against a target of Rs50 billion. The auction results indicate substantial investor demand for government backed Islamic financial instruments across different maturity periods.
Under the Fixed Rate Discounted Government Hybrid Sukuk fresh issue, the government invited bids for three-month, six-month and one-year securities against the Rs75 billion pre-auction target. Investors submitted total face value bids of Rs344.912 billion across the three tenors, with Rs105.228 billion accepted through competitive bids. The one-year tenor accounted for the largest share of competitive acceptance, with Rs57.440 billion accepted at a cut-off price of Rs89.4394 and a cut-off yield of 11.84%. The three-month tenor followed with Rs27.446 billion accepted at a cut-off price of Rs97.4358 and a cut-off yield of 11.4353%, while Rs20.342 billion was accepted under the six-month maturity at a cut-off price of Rs94.4921 and a cut-off yield of 11.6899%. The government also accepted Rs2.998 billion through non-competitive bids across the three maturities. Of this amount, Rs1.332 billion was accepted for the three-month tenor, Rs0.795 billion for the six-month tenor and Rs0.871 billion for the one-year tenor. The weighted average yields on these non-competitive bids stood at 11.4106% for the three-month instrument, 11.6646% for the six-month instrument and 11.7874% for the one-year instrument.
Including both competitive and non-competitive bids, total acceptance under the Fixed Rate Discounted Government Hybrid Sukuk reached Rs108.226 billion in face value terms, exceeding the government’s Rs75 billion pre-auction target by a substantial margin. The one-year tenor represented the largest portion of the accepted amount at Rs58.310 billion, followed by the three-month instrument at Rs28.778 billion and the six-month tenor at Rs21.138 billion. The level of demand recorded in the auction was considerably higher than the amount ultimately accepted, with investors submitting nearly Rs345 billion in bids for the three fixed-rate instruments. The one-year maturity also carried the highest competitive cut-off yield at 11.84%, compared with 11.6899% for the six-month tenor and 11.4353% for the three-month instrument. The acceptance pattern shows that investors participated across the full range of maturities, while the government secured funding through instruments with different durations and pricing structures. The results also highlight the role of the Pakistan Stock Exchange’s auction system in facilitating the issuance of government Islamic securities to market participants.
At the same time, the Pakistan Stock Exchange conducted the first reopening of the 10-year Variable Rental Rate Government Hybrid Sukuk, which was originally issued on July 23, 2026. The long-term instrument carried a pre-auction target of Rs50 billion, while the reference or coupon rate for its first period was set at 11.3904%. Investor interest in the reopening was particularly strong, with total face value bids reaching Rs412.020 billion across a price range of Rs96.8470 to Rs99.2500. Against the Rs50 billion target, the government accepted a total face value of Rs62.750 billion. Competitive bids accounted for Rs62.500 billion of the accepted amount and were awarded at a cut-off price of Rs98.9404, corresponding to a cut-off yield of 11.5704%. A further Rs0.250 billion was accepted through non-competitive bids at a weighted average price of Rs98.9508 and a weighted average yield of 11.5686%. The scale of demand for the 10-year instrument was particularly notable, with total bids more than eight times the government’s original target for the reopening.
Combining the Rs108.226 billion raised through the Fixed Rate Discounted Government Hybrid Sukuk with the Rs62.750 billion accepted through the 10-year Variable Rental Rate Hybrid Sukuk reopening, the government raised Rs170.976 billion in face value against a combined pre-auction target of Rs125 billion. The latest auction therefore resulted in an additional Rs45.976 billion above the initial combined target. The strong bid volumes across both categories demonstrate continued investor participation in government backed Shariah compliant securities, with demand extending from short-term three-month instruments to the 10-year Variable Rental Rate sukuk. The government’s ability to raise an amount substantially above its combined target also provides another funding channel through the Islamic capital market. The results show that the fixed-rate instruments attracted Rs344.912 billion in bids, while the 10-year Variable Rental Rate sukuk generated Rs412.020 billion in bids, taking total demand across the two auction categories to more than Rs756 billion. With the government accepting Rs170.976 billion from this demand, the latest Pakistan Stock Exchange auction represents a sizeable issuance of Hybrid Sukuk and reinforces the importance of Islamic financial instruments within the country’s government securities market.
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