The Government of Pakistan has raised a combined Rs134.6 billion in face value through its latest Government of Pakistan Hybrid Sukuk and Ijarah Sukuk auctions conducted through the Pakistan Stock Exchange Auction System. The latest fundraising exercise included fresh issues of three year and five year Fixed Rental Rate Government of Pakistan Hybrid Sukuk, along with a 10 year Fixed Rate Zero Coupon Government of Pakistan Ijarah Sukuk.
The combined pre auction target for the two exercises stood at Rs150 billion. While the government did not reach the overall target, the auctions attracted significant investor interest, particularly for the three year and five year Hybrid Sukuk. The total amount raised through the Fixed Rental Rate Hybrid Sukuk auction reached Rs109.638 billion, while a further Rs25.010 billion was raised through the 10 year Ijarah Sukuk auction.
For the fresh issue of three year and five year Fixed Rental Rate Government of Pakistan Hybrid Sukuk, the government had set a pre auction target of Rs100 billion. The auction generated total face value bids of Rs229.786 billion across the two tenors, substantially exceeding the amount targeted by the government. The three year tenor received bids amounting to Rs113.300 billion, while bids for the five year tenor reached Rs116.486 billion. The strong level of demand allowed the government to accept a significant portion of the competitive bids submitted by investors.
Of the amount raised through the Fixed Rental Rate Hybrid Sukuk auction, Rs108.804 billion came through competitive bids. The five year Sukuk accounted for the larger share of competitive acceptance, with Rs75.307 billion accepted at a cut off yield of 11.7994 percent and a cut off price of 98.8931.
The three year tenor followed with Rs33.498 billion in accepted competitive bids. The three year Sukuk was priced at a cut off price of 98.1500, corresponding to a cut off yield of 11.7495 percent. The government also accepted Rs0.833 billion through non competitive bids. This included Rs0.444 billion for the five year tenor and Rs0.389 billion for the three year tenor.
For the three year Sukuk, the non competitive bids carried a weighted average price of 98.5736 and a weighted average yield of 11.5763 percent. The five year tenor recorded a weighted average price of 99.1327 and a weighted average yield of 11.7342 percent. Taking competitive and non competitive bids together, total acceptance for the Fixed Rental Rate Government of Pakistan Hybrid Sukuk reached Rs109.638 billion in face value terms. The three year tenor accounted for Rs33.887 billion, while the five year tenor contributed Rs75.751 billion.
A separate auction was conducted on the same date for a fresh issue of the 10 year Fixed Rate Zero Coupon Government of Pakistan Ijarah Sukuk. The government had established a pre auction target of Rs50 billion for the Islamic security. Investor participation in the 10 year Ijarah Sukuk was comparatively lower than the target, with total face value bids reaching Rs25.250 billion. The bids were submitted within a price range of 30.9563 to 31.0727.
The government accepted nearly the entire amount offered by investors, raising Rs25.010 billion in total face value. Competitive bids accounted for Rs25 billion of the accepted amount, while Rs0.010 billion, equivalent to Rs9.680 million, was accepted through non competitive bids. The accepted competitive and non competitive bids for the 10 year Zero Coupon Government of Pakistan Ijarah Sukuk settled at a cut off price of 31.0727. The corresponding cut off yield stood at 12.3989 percent. Combined, the two auctions generated Rs134.648 billion in face value proceeds, or approximately Rs134.6 billion when rounded. The results provide a snapshot of investor demand for government backed Islamic securities across different maturities, with the Hybrid Sukuk auction attracting considerably stronger demand than the 10 year Ijarah issue relative to their respective targets.
The latest issuance also adds to the government’s use of Sukuk instruments to raise financing through the domestic capital market. The participation recorded in the three year and five year Hybrid Sukuk indicates continued demand for government securities offering fixed rental structures, while the Ijarah auction provides another avenue for Islamic financing through a longer maturity instrument. The auction results come as Pakistan continues to use both conventional and Shariah compliant instruments as part of its broader domestic financing strategy. The latest transaction through the Pakistan Stock Exchange Auction System demonstrates the role of Sukuk in providing government financing while offering investors access to government backed Islamic securities across different maturities.
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