K-Electric Limited (PSX: KEL), one of Pakistan’s primary power utility providers, has formally submitted an application to the Pakistan Stock Exchange (PSX) for the listing of its rated, unsecured, short-term Sukuk certificates. This move marks another key step in the evolving landscape of Islamic finance within the country’s capital markets.
According to a notification issued by the PSX, the total size of the Sukuk issuance stands at Rs3 billion. Out of this amount, Rs1 billion has already been allocated to Pre-IPO investors, reflecting initial confidence in the offering. The remaining Rs2 billion is now being made available to the general public via a public offering, which also includes a Green-Shoe option of Rs1 billion. The Green-Shoe option enables the issuer to offer additional units if investor demand exceeds initial expectations, indicating a flexible approach in capital raising.
The short-term Sukuk certificates represent a Shariah-compliant investment instrument, appealing particularly to investors seeking non-interest-bearing securities aligned with Islamic financial principles. The listing initiative is intended to broaden the investor base and deepen the domestic debt market while offering K-Electric additional liquidity avenues to manage its financing needs.
To ensure transparency and regulatory compliance, the Securities and Exchange Commission of Pakistan (SECP) has facilitated public scrutiny of the offering. In accordance with Circular No. 16 of 2023, issued by the SECP on November 8, 2023, the Draft Prospectus for K-Electric’s Sukuk certificates has been made publicly accessible. Stakeholders and members of the public can now review and submit their comments on the draft prospectus through the PSX’s official website, specifically in the section titled “Public Comments on Draft Prospectus of Sukuk Certificates of K-Electric.”
This process serves a dual purpose. Not only does it enhance transparency in the issuance of capital market instruments, but it also encourages public engagement in financial offerings, particularly those involving alternative instruments like Sukuk. Such measures underscore the regulatory body’s commitment to fostering a secure and inclusive financial ecosystem that promotes both traditional and Islamic modes of investment.
K-Electric’s decision to issue and list Sukuk reflects the growing trend among Pakistani corporations to diversify their funding sources. Sukuk, as a tool, continues to gain traction among institutions looking to align with Shariah principles while tapping into a broader investor pool. The public offering and listing of these instruments on the PSX further signal the maturity of the local debt market and the increased role of Islamic finance in Pakistan’s financial system.
As the draft prospectus enters the public review stage, market participants and observers will be keenly watching investor response and regulatory developments. If successful, the offering could set a precedent for other companies considering similar Shariah-compliant financing options in the near future.