Khaadi plans to raise up to Rs8.3 billion through pre-IPO placement and an initial public offering to expand its retail network and transform stores.
KARACHI: Khaadi Pakistan Ltd. plans to raise up to Rs8.3 billion through a combination of pre-IPO placement and an initial public offering, potentially making it the first pure-play fashion retailer to list on the Pakistan Stock Exchange and the largest IPO by a private company in Pakistan, according to reports by Mettis and Bloomberg.
The fashion retailer, a subsidiary of Weaves Corporation Ltd., has already placed 250 million shares with blue-chip investors through a pre-IPO placement at Rs12.40 to Rs15.20 per share, raising between Rs3.1 billion and Rs3.8 billion, Mettis reported.
The company plans to offer another 250 million shares through the IPO at Rs12.40 to Rs18 per share, potentially generating an additional Rs3.1 billion to Rs4.5 billion. Combined proceeds could therefore reach between Rs6.2 billion and Rs8.3 billion, equivalent to roughly $22 million to $30 million.
Arif Habib Ltd. is serving as lead manager and book runner for the transaction, according to the reports. Bookbuilding is expected in November, Mettis reported.
At the maximum price, the offering would surpass the share sale by Chinese tyre venture Service Long March earlier this year to become the largest IPO by a private company in Pakistan, Bloomberg reported, citing a company statement.
IPO proceeds to fund store transformation
Khaadi plans to use most of the IPO proceeds to finance capital expenditure for its “Experience Store” format, which the company says is designed to improve customer experience and expand its product range.
The company currently operates 31 stores in Pakistan. By the first half of 2026, 18 had been converted into the new format, while the remaining 13 were in the process of conversion, Mettis reported.
Khaadi plans annual capital expenditure of about Rs3.5 billion from 2027 onward, funded through IPO proceeds and internally generated cash. Its strategy has also shifted from a “go-wide” model focused on rapid geographic expansion to a “go-deep” approach centred on fewer, larger and more productive stores.
Profit targets and expanding margins
Khaadi reported profit after tax of Rs1.6 billion in the first half of 2026, compared with Rs1.7 billion for the full year of 2025 and Rs1.4 billion in 2024.
The company is targeting PAT of more than Rs3.1 billion for 2026 and Rs4.8 billion for 2027, according to Mettis. Based on its 2026 earnings estimate, Khaadi said the shares are being offered at a post-money price-to-earnings multiple of about 10 times, falling to an estimated 6.5 times for 2027.
Gross profit reached Rs6.3 billion in the first half of 2026, while gross margin improved to 37%, compared with 36% in 2025 and 34% in 2024. Operating profit stood at Rs2.6 billion.
From Karachi outlet to international brand
Founded by Shamoon Sultan in 1998, Khaadi began with a 400-square-foot store in Karachi’s Zamzama area. The company initially focused on menswear before entering womenswear in 2002 and launching Khaadi Khaas, its luxury line, in 2008.
Khaadi now operates in 14 Pakistani cities, while its e-commerce platform serves customers in more than 200 cities. Its largest store in South Asia covers about 45,000 square feet.
Through separate subsidiaries, Weaves Corporation also operates Khaadi outlets in the UAE, UK and US.
International Finance Corp., a member of the World Bank Group, invested $25 million in Khaadi in 2022 for a minority equity stake. According to the company, the investment marked IFC’s first global investment in the fashion retail sector.
The proposed listing comes during a record year for Pakistan’s IPO market, with 13 deals raising a combined Rs24.9 billion so far, according to Bloomberg data.
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