Khaadi heads to PSX at 99.2x face value

October 08, 2026 (MLN): Khaadi has been part of Pakistani wardrobes for more than two decades. From this month, investors can buy a share in the company as well as its clothes, and the price is about 99 times the share's face value.

Khaadi Pakistan Limited's draft prospectus, placed on the Pakistan Stock Exchange (PSX) website on Thursday for public comments, sets a book-building floor price of Rs12.40 per share. The face value of each share is Rs0.125, or 12.5 paisa. At the floor, investors would pay 99.2 times face value. At the Rs18.00 upper limit of the price band, the multiple rises to 144 times.

For every Rs100 an investor puts in at the floor, about one rupee goes into Khaadi's share capital. The remaining Rs99 is share premium, the price the market is being asked to pay for the brand, its store network and its profit record.

From a 400 sq ft store to the stock exchange

Khaadi opened its first store on December 13, 1998: a 400-square-foot handloom outlet in Karachi's Zamzama, founded by Shamoon Sultan. The brand takes its name from khaddar, the hand-woven fabric it set out to bring back into everyday fashion, according to the prospectus.

The company now operates 31 outlets across Pakistan alongside an online store. It reported revenue of Rs25.1bn in CY25.

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

Face value set weeks before filing

The 12.5-paisa face value is recent. On June 24, 2026, Khaadi issued bonus shares that raised its paid-up capital from about Rs5mn to Rs250mn. Two days later, shareholders approved a stock split that cut the face value from Rs10 to Rs0.125, turning 25mn shares into 2bn.

A split does not change the multiple of price to face value. Had Khaadi kept a Rs10 face value, the same offer would be priced at Rs992 per share, still 99.2 times face value.

The multiple reflects how much equity Khaadi has built on a small share capital base. At June 30, 2026, share capital stood at Rs250mn against a net worth of Rs7.48bn. That puts book value at Rs3.74 per share, roughly 30 times face value, before any IPO premium.

What the price means on earnings and book value

Face value alone does not show whether the offer is fairly priced. On earnings and book value, the draft prospectus gives a fuller picture:

*Mettis calculation. Floor-price figures are from the prospectus.

The prospectus says no listed company is directly comparable, because Khaadi is a pure retailer without in-house manufacturing. The Consultant to the Issue values the share at Rs28.16 using a discounted cash flow model.

Where the money goes

At the floor price, the IPO raises Rs3.1bn and the pre-IPO placement a further Rs3.1–3.8bn. All 500mn shares are new, and the sponsor is not selling.

Of the Rs3.1bn IPO proceeds, Rs1.76bn (57%) will repay bridge loans from HBL, Faysal Bank, Askari Bank and Al Baraka Bank. Those loans funded Experience Stores that have already been built. The remaining Rs1.34bn (43%) goes to completing an eight-store Experience Store programme due by 1H CY27; four of those stores were already open by June 2026.

Khaadi also plans to encourage customers at selected stores to subscribe to the retail portion of the IPO, which is fully underwritten.

Public comments open until October 15

PSX has invited written comments on the draft prospectus until close of business on Thursday, October 15, 2026, at comments.draftprospectus@psx.com.pk. Bidding and subscription dates have not yet been set.

Mettis to publish full investigative analysis

Mettis Global will publish a traditional investigative IPO analysis of Khaadi Pakistan Limited as soon as the final prospectus, approved by PSX and the Securities and Exchange Commission of Pakistan (SECP), is available. It will cover earnings quality, cash flow, borrowings, related-party dealings, litigation, the auditor's report, management's projections and the Rs28.16 valuation. A question-and-answer explainer for retail investors will be published alongside it.

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.

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