Govt cuts 3-year hybrid, 10-year Ijarah Sukuk auction targets by half to Rs25 billion each

Profit by Pakistan Today reported that the government has cut the target size of two Sukuk auctions to Rs25 billion each, down from Rs50 billion. A revised notice from the Pakistan Stock Exchange, issued on October 6, followed advice from the Debt Management Office and also updated the cap on non-competitive bids per investor. All other terms from the October 5 notice are unchanged.

The three-year hybrid Sukuk now targets Rs25 billion, while the five-year instrument keeps its Rs50 billion goal. Investors will receive a locked-in 12% on the three-year paper and 12.25% on the five-year one, with both issued on October 8, 2026. The hybrid pairs Ijarah sale-and-lease-back with Commodity Murabaha, directing 55% of proceeds to the former and 45% to the latter.

The 10-year zero-coupon Ijarah Sukuk, maturing on October 8, 2036, will be sold below face value, with the gap counted as part of what investors earn. Ijarah rent is fixed for the full tenor using the weighted average yield and paid at maturity. Each Sukuk has a face value of Rs5,000, and investors can trade them on the PSX.