Khaadi, one of Pakistan’s best-known fashion retailers, is preparing to list on the Pakistan Stock Exchange, and the Khaadi IPO has started a debate about the difference between a good company and a good stock. The draft prospectus, which the PSX has placed for public comment until 15 October, prices the shares between Rs12.40 and Rs18, valuing the company at Rs31 billion to Rs45 billion. On Monday, Profit magazine urged readers to “tread with caution”, pointing to how much of Khaadi’s revenue flows to companies linked to its owners.
The short version
- Khaadi Pakistan plans to issue 500 million new shares, 20% of its post-listing capital: 250 million through the IPO and 250 million in a pre-IPO placement.
- The IPO price range is Rs12.40 to Rs18 a share, implying a market value of Rs31 billion to Rs45 billion.
- At the floor price, the IPO raises about Rs3.1 billion: Rs1.76 billion to repay bridge loans and Rs1.34 billion to finish an eight-store expansion.
- Profit’s review of the prospectus finds that about Rs54 of every Rs100 Khaadi takes in goes to companies owned by its owners or close family that are not part of the listing.
What happened
According to the draft prospectus, as reported by Profit, 175 million of the IPO shares will be sold through book-building and 75 million to retail investors at the price discovered. The pre-IPO placement of 250 million shares is priced at Rs12.40 to Rs15.20. Arif Habib Limited is lead manager, the listing is on the Main Board, and bidding dates have not yet been set. The sponsor, Weaves Corporation, will keep 80% of the company.
The company reported revenue of Rs25.13 billion and net profit of Rs1.67 billion in 2025, and revenue of Rs17.08 billion with profit of Rs1.61 billion in the first half of 2026. It runs 31 stores in 14 cities, 18 of them larger “Experience Stores”. Mettis Global reports a trailing price-to-earnings ratio of 11.97 at the floor price, and that the consultant to the issue values the share at Rs28.16 using a discounted cash flow model, well above the top of the range.
Khaadi IPO: the price range sits below the adviser’s own valuation
Implied value of Khaadi Pakistan, Rs billion, based on 2.5 billion post-IPO shares
Why it matters
A large consumer brand coming to market is a test of investor appetite at a difficult time. The KSE-100 has been volatile, falling almost 2,000 points on Monday after emergency rule was imposed in Khyber Pakhtunkhwa and slipping over the previous week as oil and politics set the direction. Profit’s analysis of the Khaadi IPO highlights the related-party structure: a supplier owned by a close relative, Texmark, accounts for 55% of the cost of goods sold, while about 6.5% of revenue goes to a property company that owns many of the stores and 5.1% to the holding company. Profit also notes that revenue has grown about 6% a year over a decade, against average inflation of 10.8%.
The knock-on effects
First order: pricing the book
Institutional bids will decide where in the Rs12.40 to Rs18 range the shares settle. A strike price near the floor would raise less for the expansion and signal caution; one near the cap would value the company at about six times its June 2026 net worth.
Second order: governance under the spotlight
The prospectus disclosures give investors an unusually detailed view of how a family-owned retailer operates. How the market prices those related-party payments could shape how other family businesses structure their listings.
Third order: a signal for retail listings
A well-received Khaadi IPO could encourage other consumer brands to raise equity rather than bank debt, adding to a pipeline of new businesses that company registrations show is still growing.
Who could benefit
- Khaadi’s lenders, HBL, Faysal Bank, Askari Bank and Al Baraka Bank, whose bridge loans would be repaid.
- Brokers and the lead manager, from a sizeable book-building and retail offer.
- Other consumer companies considering a listing, if demand is strong.
Who may face pressure
- Minority shareholders, who Profit argues would bear losses or slower growth before the owners do.
- Other listed textile and apparel companies, which may be compared against Khaadi’s valuation.
- The PSX’s IPO pipeline, if weak markets push bids towards the floor.
What to watch
- 15 October: deadline for public comments on the draft prospectus.
- Announcement of book-building and retail subscription dates.
- The strike price, and how far it lands from the Rs12.40 floor.
- Progress on the remaining Experience Stores, due by the first half of 2027.
Sources
- Profit by Pakistan Today, Tread with caution on the Khaadi IPO, 12 October 2026
- Profit by Pakistan Today, PSX places Khaadi Pakistan’s draft IPO prospectus for public comments ahead of planned listing, 9 October 2026
- Mettis Global, Khaadi heads to PSX at 99.2x face value, 8 October 2026
- Pakistan Stock Exchange, Placement of draft prospectus of Khaadi Pakistan Limited on PSX website for seeking public comments, 8 October 2026
This is analysis, not investment advice. Figures are as of 12 October 2026.
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