Govt Raises Rs. 114 Billion Through 3rd Hybrid Sukuk Auction

Government of Pakistan has raised Rs. 114.347 billion through 3rd Hybrid Sukuk Auction, marking the second such issuance in the current month, amid strong investor demand for Shariah-compliant instruments.

Meezan Bank Limited acted as the Lead Joint Financial Advisor (JFA) for the transaction, playing a key role in structuring and executing the issuance. The auction, conducted through the Pakistan Stock Exchange (PSX) on behalf of the Ministry of Finance (MoF), attracted total bids reaching Rs. 354.395 billion (face value), translating into a realized value of Rs. 344.716 billion.

According to auction results, the cut-off yield for the one-year fixed-rate (discounted) Sukuk was set at 12.00 percent, up by 20 basis points compared to the previous level.

For the longer tenor, the 10-year Variable Rental Rate (VRR) Sukuk was priced at 11.7568 percent, offering a spread of 38.83 basis points over the reference rate of 11.3685 percent.

Market participants attributed the strong response to improving liquidity conditions and sustained appetite among institutional investors for Islamic investment avenues, particularly sovereign Sukuk offering diversified return structures.

The Hybrid Sukuk, which combines fixed and floating rate features, is designed to broaden the government’s Shariah-compliant borrowing base while providing flexibility to investors with varying risk-return preferences.