June 13, 2014 / 1:36 AM / 4 years ago

Pakistan's Engro Corp issues two-tranche retail sukuk

June 13 (Reuters) - Pakistani conglomerate Engro Corp , a former unit of Exxon Mobil Corp, has raised 1 billion rupees ($10 million) from an issue of Islamic bonds in the retail market, the company said in a regulatory filing.

The transaction is part of a 4 billion rupee programme set up earlier this year by Engro and a rare example of a retail offering of sukuk - investment certificates which follow religious principles such as a ban on interest and gambling.

Engro’s sukuk was sold in two tenors: a three-year 750 million rupee tranche with a 13 percent profit rate, and a five-year 250 million rupee tranche with a 13.5 percent profit rate.

It follows a retail sukuk by Karachi-based utility K-Electric, which tapped the market in February to raise 6 billion rupees through a three-tranche deal.

Islamic finance is expanding in Pakistan as a flurry of initiatives by regulators aims to develop the industry in the world’s second-most populous Muslim nation. ($1 = 98.3500 Pakistani rupees) (Editing by Eric Meijer)

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