Government raises Rs114.35bn in third hybrid Sukuk auction

The government has raised Rs114.347 billion through the third auction of its Hybrid Sukuk, reflecting sustained investor appetite for Shariah-compliant sovereign instruments, according to a statement issued on Thursday.

The auction, conducted via the Pakistan Stock Exchange on behalf of the Ministry of Finance, drew total bids of Rs354.395 billion (face value), with realised value recorded at Rs344.716 billion.

Meezan Bank Limited served as Lead Joint Financial Advisor for the transaction.

On pricing, the cut-off yield for the one-year fixed-rate (discounted) Sukuk was set at 12%, reflecting an increase of 20 basis points from the previous auction.

For the longer tenor, the 10-year Variable Rental Rate Sukuk was priced at 11.7568%, carrying a spread of 38.83 basis points over the reference rate of 11.3685%.

Officials and market participants attributed the strong participation to improving liquidity conditions and continued institutional demand for Islamic sovereign securities with diversified return structures.

The Hybrid Sukuk structure combines fixed and floating rate components, designed to expand the government’s Shariah-compliant financing base while offering flexibility to investors with different risk-return preferences.

In April, the government had also completed the inaugural Hybrid Sukuk issuance, raising over Rs109 billion in an oversubscribed auction.