Khaadi Prepares for PSX Debut with Share Price Near 99 Times Face Value

October 08, 2026 (MLN): Khaadi has been a staple in Pakistani wardrobes for over twenty years. Starting this month, investors can purchase shares in the company alongside its apparel, with the offer price set at roughly 99 times the share’s face value.

The draft prospectus of Khaadi Pakistan Limited, posted on the Pakistan Stock Exchange website for public comment, establishes a book‑building floor price of Rs12.40 per share. Each share carries a face value of Rs0.125 (12.5 paisa). At this floor, the price represents 99.2 × face value; at the upper band limit of Rs18.00, the multiple climbs to 144 × face value.

For every Rs100 invested at the floor price, roughly one rupee contributes to share capital, while the remaining Rs99 constitutes share premium—reflecting the market’s valuation of the brand, its retail footprint, and its earnings history.

From a 400‑square‑foot outlet to a stock‑exchange listing

Khaadi launched its inaugural store on December 13, 1998—a 400‑square‑foot handloom shop in Karachi’s Zamzama district, founded by Shamoon Sultan. The name derives from khaddar, the hand‑woven textile the company aimed to revive in daily fashion, as noted in the prospectus.

Today the company runs 31 stores nationwide plus an e‑commerce platform, and it recorded revenue of Rs25.1 billion in calendar year 2025.

Weaves Corporation Limited, the sponsor and sole shareholder, will retain an 80 % stake after the listing. Weaves itself is beneficially owned by Shamoon Sultan (80 %) and the International Finance Corporation—a World Bank Group member (20 %).

Face Value Determined Weeks Prior to Filing

The Rs0.125 (12.5 paisa) face value is a recent development. On June 24, 2026, Khaadi issued bonus shares that lifted paid‑up capital from roughly Rs5 million to Rs250 million. Two days later, shareholders endorsed a stock split that reduced the face value from Rs10 to Rs0.125, converting 25 million shares into 2 billion.

A stock split does not alter the price‑to‑face‑value multiple. If the face value had remained at Rs10, the equivalent offer price would be Rs992 per share—still 99.2 × face value.

The multiple underscores the equity Khaadi has accumulated relative to its modest share‑capital base. As of June 30, 2026, share capital amounted to Rs250 million while net worth reached Rs7.48 billion, yielding a book value of Rs3.74 per share—about 30 × face value ahead of any IPO premium.

Implications for Earnings and Book Value

Face value alone does not indicate whether the offer is fairly priced. The draft prospectus provides a more complete view based on earnings and book value.

The prospectus notes that no directly comparable listed company exists, as Khaadi is a pure retailer without in‑house manufacturing. The issue’s consultant values the share at Rs28.16 based on a discounted‑cash‑flow model.

Use of Proceeds

At the floor price, the IPO is expected to raise Rs3.1 billion, with the pre‑IPO placement adding another Rs3.1–3.8 billion. All 500 million shares being offered are newly issued, and the sponsor will not sell any existing holdings.

Of the Rs3.1 billion IPO proceeds, Rs1.76 billion (57 %) will be used to repay bridge loans from HBL, Faysal Bank, Askari Bank and Al Baraka Bank—loans that financed the already‑constructed Experience Stores. The remaining Rs1.34 billion (43 %) will fund the completion of an eight‑store Experience Store programme slated for the first half of CY27, four of which were already operational by June 2026.

Khaadi also intends to invite customers at selected outlets to subscribe to the retail tranche of the IPO, which is fully underwritten.

Public Comment Period

The PSX invites written comments on the draft prospectus until the close of business on Thursday, October 15, 2026, via comments.draftprospectus@psx.com.pk. Bidding and subscription dates have yet to be announced.

Mettis Planned Investigative Analysis

Mettis Global will release a comprehensive investigative IPO analysis of Khaadi Pakistan Limited once the final prospectus—approved by the PSX and the Securities and Exchange Commission of Pakistan (SECP)—is made public. The report will examine earnings quality, cash flow, borrowings, related‑party transactions, litigation, the auditor’s report, management’s forecasts, and the Rs28.16 valuation. A FAQ‑style explainer for retail investors will accompany the analysis.

This story is based on the draft prospectus placed on the PSX website on October 8, 2026 (Notice N-1229). Figures may change in the final approved prospectus.

Source link