Khaadi plans to raise up to PKR 8.3 billion ahead of PSX listing

Khaadi Pakistan Limited plans to raise up to PKR 8.3 billion through a combination of a pre-IPO placement and an initial public offering as the fashion retailer prepares for a listing on the Pakistan Stock Exchange.

The company, a subsidiary of Weaves Corporation Limited, has placed 250 million shares with blue-chip investors through a pre-IPO placement at a stated price band of PKR 12.40 to PKR 15.20 per share, implying proceeds of PKR 3.1 billion to PKR 3.8 billion depending on final pricing.

A further 250 million shares will be offered through the IPO at PKR 12.40 to PKR 18 per share, potentially raising PKR 3.1 billion to PKR 4.5 billion.

Combined proceeds from the pre-IPO placement and IPO would therefore range from PKR 6.2 billion to PKR 8.3 billion.

Arif Habib Limited is serving as exclusive lead manager and bookrunner for the transaction, according to the company.

Khaadi says it would become the first pure-play fashion retail company listed on the Pakistan Stock Exchange.

The capital raising will fund investment in Khaadi’s Experience Store model as the company transforms its retail network and increases the breadth and frequency of products available in its stores.

How will Khaadi use the IPO proceeds?

Khaadi plans to convert its entire network of 31 outlets in Pakistan into Experience Stores. As of the first half of 2026, 18 Experience Stores were operational, leaving 13 outlets in the process of conversion, according to the company.

The expansion will be financed through IPO proceeds and internally generated cash, with Khaadi planning to allocate PKR 3.5 billion annually to capital expenditure from 2027 onward.

The company said the Experience Store model is intended to improve the customer experience and broaden the range of products available across its network.

Khaadi’s retail strategy has shifted from a “go-wide” approach centered on rapidly expanding its geographic footprint to a “go-deep” model focused on fewer, larger and more productive stores.

The company is also increasing the breadth and frequency of its product assortment. New products are introduced across the network every week, with launches increasing to twice a week during festive periods.

Products are released in smaller batches, allowing Khaadi to refresh its assortment more frequently and offer a wider variety of designs throughout a season.

What profit does Khaadi expect in 2026 and 2027?

Khaadi expects profit after tax to exceed PKR 3.1 billion in calendar year 2026 and PKR 4.8 billion in 2027. Profit after tax stood at PKR 1.6 billion in the first half of 2026, compared with PKR 1.7 billion for full-year 2025 and PKR 1.4 billion in 2024.

Based on its CY2026 earnings estimate, the company said the shares are being offered at a post-money price-to-earnings multiple of about 10 times.

Bookbuilding is expected to take place in November. Based on projected CY2027 earnings, Khaadi estimates a post-IPO price-to-earnings multiple of about 6.5 times.

Gross profit stood at PKR 6.3 billion in the first half of 2026, with the gross profit margin improving to 37% from 36% in 2025 and 34% in 2024.

Operating profit reached PKR 2.6 billion in the first half of 2026, representing a 15% margin, compared with PKR 3.2 billion and a 13% margin for full-year 2025.

How did Khaadi grow from one store into a national retailer?

Khaadi was founded by Shamoon Sultan in 1998 and began with a roughly 400-square-foot store in Karachi’s Zamzama neighborhood. It later expanded into women’s ready-to-wear in 2002, introduced Khaadi Khaas in 2008 and broadened its product range further in 2012.

The company has since developed into a lifestyle retailer offering ready-to-wear clothing, fabrics, handbags, shoes, accessories, fragrances, home products and cafe offerings.

Its physical retail network spans 14 cities across Pakistan, while the company says its e-commerce operation reaches more than 200 cities.

Khaadi says its largest store covers about 45,000 square feet.

Weaves Corporation also operates the Khaadi brand internationally, with operations in Pakistan, the United Arab Emirates, the United Kingdom and the United States.

In 2022, the International Finance Corporation invested the equivalent of USD 25 million in Pakistani rupees for a minority stake in Khaadi Corporation. IFC described it as its first investment in Pakistan’s fashion retail sector.