SECP Seeks Additional Disclosures from Khaadi Ahead of Planned PSX Listing

The Securities and Exchange Commission of Pakistan (SECP) has asked fashion retailer Khaadi for additional disclosures as the company moves toward a proposed initial public offering and listing on the Pakistan Stock Exchange, according to sources familiar with the matter. The regulator's queries touch on the company's business model, financial statements and the basis for its proposed share valuation.

Sources said Khaadi and SECP officials have held discussions on the listing, with the regulator seeking more information about Khaadi International's franchise operations and its experiential stores in various cities. The commission has also asked the company to justify the face value of its shares and to explain how it arrived at the proposed valuation.

Several financial and disclosure questions have emerged from the company's draft prospectus and audited accounts. According to sources, Khaadi's audited accounts for December 2025 show a loss of roughly Rs. 1.5 billion, which appears to have been offset in part by gains from the revaluation of properties. The regulator has asked for further details on the property valuation exercise, including the valuation report and the assumptions used to determine asset values.

Another point of scrutiny is the gap between property valuation gains reported in the 2025 accounts and those recorded in 2024, when a fair-value gain of around Rs. 1 million was reported. The company has been asked to explain the difference and give investors a clear account of the valuation process. Questions have also been raised about the valuation of Khaadi's intellectual property rights, the assumptions used by its valuer, GT, and the basis for determining the share premium.

The proposed expansion plan is another area where more information may be required. The regulator is seeking a detailed breakdown of the expected investment in each new outlet, projected revenue per store, and the actual revenue generated by outlets opened during the first half of 2026, figures that would help investors assess the expansion strategy and expected returns.

Sources said the company should clearly explain how the IPO proceeds will be spent and what safeguards would apply if the sponsors seek to change their stated plans. That issue is particularly relevant given the sponsors' reported voting control and their ability to influence shareholder decisions. The additional disclosures are part of the regulatory review that precedes any public listing.

The queries come as Khaadi prepares to join a small group of Pakistani consumer and retail brands seeking public capital. A successful listing would give the company access to growth capital and provide a new investment option for retail investors, while the scrutiny of its numbers will be closely watched by market participants.

Khaadi has not publicly commented on the specific queries. The listing will proceed only after the regulator is satisfied with the disclosures and the draft prospectus meets the requirements for a public offer.