ABHI Microfinance Bank Limited is preparing to raise up to PKR 2.97 billion through an initial public offering (IPO) on the Pakistan Stock Exchange (PSX), following a reported financial turnaround and expansion in its lending operations. According to the bank’s prospectus and promotional material, the institution plans to offer 132 million ordinary shares, representing 13.65% of its post-IPO paid-up capital. The offering carries a floor price of PKR 15 per share, with investors participating in book building able to bid up to PKR 22.50 per share. At the floor price, the offering is valued at PKR 1.98 billion, while the maximum potential proceeds could reach PKR 2.97 billion. The bank has presented its recent financial performance as evidence of progress since its acquisition by ABHI (Private) Limited and TPL Corp Limited in January 2025. Its promotional figures show a shift from a loss after tax of approximately PKR 1.7 billion in 2024 to cumulative profits after tax of PKR 2.5 billion between January 2025 and June 2026, representing a reported profit swing of approximately PKR 4.2 billion.
The prospectus provides further details of the bank’s financial recovery, reporting a net loss of approximately PKR 1.75 billion in 2024, followed by a net profit of PKR 1.02 billion in 2025 and PKR 1.5 billion during the first half of 2026. Its equity position also improved from negative PKR 4 billion in December 2024 to positive PKR 3.1 billion by June 2026, representing an improvement of PKR 7.1 billion. However, the bank continues to face a regulatory capital challenge. Its Capital Adequacy Ratio (CAR) stood at negative 6.26% as of June 2026, below the State Bank of Pakistan’s minimum requirement of 15%. The prospectus projects the ratio to reach 7.31% by the end of 2026 and 17.82% by the end of 2027, with the IPO proceeds and retained earnings expected to support the improvement. The bank has also received regulatory relaxation for meeting the minimum capital requirement until October 2027. Its projected net profit after tax is expected to reach PKR 2.93 billion in 2026 and PKR 4.13 billion in 2027, although these estimates remain subject to business performance and other financial risks.
Digital lending and gold-backed financing are central to the bank’s business strategy. According to its promotional announcement, the bank disbursed PKR 13 billion through digital channels between January 2025 and October 2026, compared with no digital lending activity before its acquisition. Its technology-enabled financing operations include earned wage access, payroll-linked lending and other digital financing services. However, gold-backed financing represents the largest component of its lending strategy, accounting for approximately 90% of its earning assets. The bank reported a gold-backed loan portfolio of PKR 34.2 billion in 2025 and plans to expand this segment through technology that supports automated loan top-ups and rollovers. Gold-backed financing also carries a lower regulatory risk weight than unsecured lending, allowing the institution to manage its capital requirements more efficiently. The bank has received regulatory permission to exceed the standard 35% limit on gold-backed financing until November 2029. However, its concentration in this segment exposes it to risks associated with fluctuations in gold prices, collateral valuation and loan recovery. ABHI Microfinance Bank operates through more than 114 branches across over 108 cities in Pakistan, serving households, salaried workers, microentrepreneurs and small businesses through lending, savings, deposits and payment services.
The IPO will comprise 99 million shares allocated through book building and 33 million shares reserved for retail investors and the general public. Arif Habib Limited, Topline Securities Limited and Growth Securities are acting as joint lead managers, while the underwriting arrangements also include Dawood Equities. Before the offering, ABHI (Private) Limited holds 73.73% of the bank, while TPL Corp Limited owns 26.27%. Following the IPO, their respective stakes are expected to decline to 63.66% and 22.68%, with the public holding the remaining 13.65%. Investor registration is scheduled from November 2 to November 6, 2026, followed by book building on November 5 and 6. Public subscription is scheduled for November 12 and 13. The bank intends to use the proceeds to expand its lending capacity and improve its regulatory capital position. It has also indicated that dividends are not anticipated over the next two to three years as it prioritises capital adequacy and business expansion. The offering will allow investors to assess the bank’s financial recovery, digital lending operations, reliance on gold-backed financing and plans to meet regulatory requirements as it seeks to expand its presence in Pakistan’s microfinance and digital financial services market.
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