Khaadi Pakistan Ltd., a leading fashion retailer in the country, is set to raise as much as Rs8.3 billion by combining a pre-IPO placement with an initial public offering. The funds will support the expansion of its retail network and the transformation of existing outlets into larger “Experience Stores.” This move marks the largest IPO by a private company in Pakistan’s history.
As a subsidiary of Weaves Corporation Ltd., Khaadi has already placed 250 million shares with prominent investors through a pre-IPO placement, priced between Rs12.40 and Rs15.20 per share. This placement has generated between Rs3.1 billion and Rs3.8 billion. The company plans to offer an additional 250 million shares in the IPO, with prices ranging from Rs12.40 to Rs18 per share, potentially raising another Rs3.1 billion to Rs4.5 billion. Combined, the total proceeds could reach between Rs6.2 billion and Rs8.3 billion, equivalent to approximately $22 million to $30 million. Arif Habib Ltd. is managing the transaction as lead manager and book runner, with bookbuilding scheduled for November. At the highest price point, this offering would surpass the earlier share sale by Chinese tyre company Service Long March, becoming the largest private company IPO in Pakistan.
The capital raised will primarily fund the conversion of Khaadi’s outlets into the “Experience Store” format, designed to enhance customer engagement and expand product offerings. Currently, Khaadi operates 31 stores nationwide, with 18 already converted to the new format by mid-2026 and the remaining 13 undergoing transformation. The company anticipates annual capital expenditures of around Rs3.5 billion starting in 2027, financed through IPO proceeds and internal cash flows. This reflects a strategic shift from a rapid geographic expansion model to focusing on fewer, larger, and more productive stores.
Financially, Khaadi reported a profit after tax (PAT) of Rs1.6 billion in the first half of 2026, compared to Rs1.7 billion for the entire year of 2025 and Rs1.4 billion in 2024. The company targets PAT exceeding Rs3.1 billion for 2026 and Rs4.8 billion for 2027, representing growth rates of over 90% and 50%, respectively. Based on 2026 earnings estimates, shares are offered at a post-money price-to-earnings ratio of about 10 times, expected to decline to approximately 6.5 times in 2027. Gross profit rose to Rs6.3 billion in the first half of 2026, with gross margins improving to 37%, up from 36% in 2025 and 34% in 2024. Operating profit stood at Rs2.6 billion during the same period.
This IPO comes amid a record year for Pakistan’s equity market, with 13 IPOs raising a total of Rs24.9 billion so far. The 2024–2025 stock market rally and increased retail investor participation have encouraged companies to return to the public markets.
Founded in 1998 by Shamoon Sultan, Khaadi started as a 400-square-foot menswear store in Karachi’s Zamzama area. It expanded into womenswear in 2002 and launched its luxury line, Khaadi Khaas, in 2008. Today, the brand operates in 14 cities across Pakistan and serves customers in over 200 cities through its e-commerce platform. It also boasts South Asia’s largest Khaadi store, covering approximately 45,000 square feet. Through subsidiaries, Weaves Corporation manages Khaadi outlets in the UAE, UK, and US, establishing an international presence. Notably, the International Finance Corporation, part of the World Bank Group, invested $25 million in Khaadi in 2022 for a minority stake, marking IFC’s first global investment in the fashion retail sector.
