Karachi: In a strategic revision announced on September 11, 2026, the Government of Pakistan has adjusted the auction sizes for its forthcoming Hybrid and Ijarah Sukuk offerings, reducing the target from PKR 50 billion to PKR 25 billion each for the three-year fixed rental rate GoP Hybrid Sukuk and the ten-year fixed rate zero coupon GoP Ijarah Sukuk. This change was communicated through a notice to all market participants, emphasizing its significance for future investment strategies.
The Debt Management Office (DMO) advised these revisions as part of the latest adjustments outlined in PSX Notice# PSX/N-1121. These changes also affect the non-competitive per investor maximum limit, which has been altered within the PSX Auction System. These developments follow the initial details provided in PSX Notice# PSX/N-1111 dated September 10, 2026, and are expected to streamline the investment process for market participants.
According to information available from the Pakistan Stock Exchange (PSX), the auction size revision is part of a broader strategy to optimize investment inflows and align with current economic conditions. The Sukuk, issued by the Pakistan Domestic Sukuk Company Limited—a subsidiary of the Ministry of Finance—are set to reopen on September 21, 2026, with maturity dates on August 5, 2029, for the three-year term and August 5, 2031, for the five-year term.
The structural framework of these Sukuks involves a combination of Ijarah Sale and Lease Back (Ijarah SLB) transactions and Commodity Murabaha Transactions, with 55% of proceeds allocated to the Ijarah SLB component and 45% to Commodity Murabaha. This approach ensures a diversified investment portfolio and aligns with Shariah compliance, as detailed in separate documents approved by the Shariah Advisor.
Each Sukuk carries a face value of PKR 5,000, representing a proportionate ownership in a pool of assets. The auction will follow a pay-as-you-bid methodology, requiring investors to submit bids specifying both the Bid Price and Face Value. Successful bids must meet or exceed the Cut-off Price set by the Ministry of Finance.
The fixed profit rates stand at 11% for the three-year Sukuk and 11.5% for the five-year Sukuk, with profits driven by the underlying transactions and a fixed component from Commodity Murabaha. Profits are distributed semi-annually, offering investors a predictable return on investment. The joint financial advisors and Shariah advisor to the issue include Meezan Bank Limited, Dubai Islamic Bank (Pakistan) Limited, Bank Islami Pakistan Limited, and Bank Alfalah Limited.
The Sukuks are tradable on the Pakistan Stock Exchange, providing liquidity and flexibility for investors. This strategic revision in auction sizes is expected to enhance market dynamics and attract a broader range of investors, contributing to the overall growth of Pakistan's financial markets.