Khaadi plans to raise up to Rs8.3bn through pre-IPO, IPO

October 01, 2026 (MLN): Khaadi Pakistan Limited, one of Pakistan’s leading fashion retailers, plans to raise up to Rs8.3 billion through a combination of pre-IPO placement and an initial public offering (IPO) to expand its retail footprint and convert its outlets into larger “Experience Stores.”

Arif Habib Limited is acting as the lead manager and book runner for the transaction.

A subsidiary of Weaves Corporation Limited, Khaadi has already placed 250 million shares with blue-chip investors through a pre-IPO placement at a price range of Rs12.40 to Rs15.20 per share, raising between Rs3.1bn and Rs3.8bn.

The company plans to offer another 250m shares through the IPO at a price range of Rs12.40 to Rs18 per share, potentially raising between Rs3.1bn and Rs4.5bn.

Combined proceeds from the pre-IPO and IPO could therefore range between Rs6.2bn and Rs8.3bn.

IPO proceeds to finance Experience Stores

The funds raised through the IPO will primarily be used to finance capital expenditure for Khaadi’s Experience Store model.

The company said the new format is aimed at improving the customer experience while allowing it to offer a broader range of products across its retail network.

Khaadi currently operates 31 stores in Pakistan and plans to convert its entire network into Experience Stores.

As of the first half of 2026, 18 stores had already been converted, while the remaining 13 were in the process of conversion.

The company plans to finance the expansion through IPO proceeds and internally generated cash, with annual capital expenditure of around Rs3.5bn planned from 2027 onwards.

Khaadi has also shifted its retail strategy from a “go-wide” model, focused on rapid geographic expansion, toward a “go-deep” strategy centered on fewer, larger and more productive stores.

Alongside the new store format, the company is expanding the breadth and frequency of its product assortment.

New products are introduced across the network every week, with the frequency increasing to twice a week during festive periods. The company releases products in smaller batches, allowing it to refresh its assortment regularly and provide customers with a wider range of designs throughout the season.

Khaadi targets over Rs4.8bn profit by 2027

Khaadi recorded profit after tax (PAT) of Rs1.6bn in 1H26, compared with Rs1.7bn in CY25 and Rs1.4bn in 2024.

The company is targeting PAT of more than Rs3.1bn in CY26 and Rs4.8bn in CY27, representing growth of more than 90% and 50%, respectively, from the previous year's levels.

Based on its CY26 earnings estimate, the company said its shares are being offered at a post-money price-to-earnings (P/E) multiple of around 10x.

For CY27, the post-IPO P/E multiple is estimated at 6.5x.

The bookbuilding for the IPO is expected to take place in November 2026.

Khaadi is set to become the first pure-play fashion retail company to be listed on the Pakistan Stock Exchange.

Gross margin rises to 37%

Khaadi’s gross profit increased to Rs6.3bn during 1H26, while its gross profit margin improved to 37%, compared with 36% in CY25 and 34% in CY24.

Operating profit stood at Rs2.6bn during 1H26, translating into an operating margin of 15%.

For CY25, operating profit was Rs3.2bn, with an operating margin of 13%.

From a 400-square-foot store to a national retailer

Founded by Shamoon Sultan in 1998, Khaadi began operations from a 400-square-foot store in Karachi’s Zamzama area.

The company initially focused on menswear before entering womenswear in 2002 and moving into the luxury segment with Khaadi Khaas in 2008.

In 2012, Khaadi expanded its product portfolio by introducing colourful lawn prints, subsequently developing into a broader lifestyle retailer.

Its current product portfolio includes ready-to-wear clothing, fabrics, handbags, footwear, accessories, fragrances, home products and cafes.

The company operates across 14 cities in Pakistan, while its e-commerce platform serves customers in more than 200 cities.

Khaadi also operates its largest store in South Asia, spanning around 45,000 square feet.

Through separate subsidiaries, Weaves Corporation operates Khaadi outlets in Pakistan, the UAE, the UK and the US, giving the brand an international retail presence.

IFC invested $25m in Khaadi

The International Finance Corporation (IFC), a member of the World Bank Group, invested $25 million in Khaadi in 2022 in exchange for a minority equity stake.

According to the company, the investment marked IFC’s first investment globally in the fashion retail sector.

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