ABHI’s IPO Opens at Rs15 a Share. Here Is What the Prospectus Says.

ABHI Microfinance Bank’s IPO is live on the Pakistan Stock Exchange, and the first day of book-building ended at the floor price. Investors bid for 79.07 million shares on Thursday against the 99 million on offer to institutions, corporates and high-net-worth individuals, Business Recorder reported. The price held at Rs15, the bottom of a band that reaches Rs22.50. The two-day Dutch auction closes on Friday, November 6, and the strike price gets set from there.

The full issue is 132 million shares, or 13.65% of the post-IPO share capital. At the floor it raises Rs1.98 billion (about $7.2 million). At the cap it raises Rs2.97 billion (about $10.7 million). Bidding in this phase starts at Rs2 million, which is why retail investors wait for the November 12 and 13 window, when the last 33 million shares go on sale at the strike price. Arif Habib, Topline, Growth Securities and Dawood Equities have underwritten that portion in full.

We read through the bank’s prospectus, published on October 30, to see what sits behind the numbers.

Why a profitable bank needs fresh capital

ABHI earned Rs1.5 billion in the first half of 2026 and projects about Rs2.9 billion for the full year. It also has a capital adequacy ratio (CAR) of negative 6.26% as of June 30, against a State Bank minimum of 15% for microfinance banks.

The gap is inherited. The bank started in 2008 as Kashf Microfinance Bank, passed to FINCA in 2013, and was acquired by ABHI (Private) Limited and TPL Corp on January 17, 2025. The prospectus blames the losses of 2021 to 2024 on long-tenor loans with loose criteria, lending rates that ignored risk, weak recovery on bad accounts and a thin deposit base. By the end of 2024 the CAR stood at negative 108.27%.

The turnaround since then has been steep:

• Net result moved from a Rs1.754 billion loss in 2024 to a Rs1.019 billion profit in 2025 (about $3.7 million).
• Non-performing loans fell from 10.23% of the portfolio in 2023 to 0.61% by mid-2026.
• The loan book grew from Rs19.2 billion at the end of 2024 to Rs50.1 billion in June 2026 (about $181 million), while deposits rose from Rs36.2 billion to Rs86.2 billion.
• Equity swung from minus Rs397 million at the end of 2025 to plus Rs3.1 billion in June, a figure that includes a Rs2 billion advance from ABHI (Private) against future shares.

The State Bank has relaxed the 15% CAR requirement until October 2027. The bank’s model projects a CAR of 7.31% by the end of 2026 and 17.77% by the end of 2027, which would put it above the minimum in time.

The gold engine under the fintech label

Most coverage of ABHI centers on earned wage access, where employees draw part of their salary before payday. That product is live and growing. Gold-backed loans, though, make up 88.7% of the Rs50.1 billion loan book. Digital lending (earned wage access, advance salary and merchant financing) sits at Rs3.0 billion, or 6.1%.

The prospectus explains why most of the IPO money goes to gold. Under State Bank rules, gold-backed loans carry a 20% risk weight and unsecured loans carry 100%, so the same capital can support close to five times more gold lending. With the CAR still negative, that arithmetic decides where growth can happen. The bank projects gold at 88.73% of its average loan book in 2026 and 85.37% in 2027, while earned wage access and payroll-linked lending rise from 4.40% to 7.33%.

The State Bank has also waived the 35% cap on gold-backed lending until November 2029. The bank says it will bring the share down gradually as other segments grow faster.

The market behind it is large. The prospectus estimates that Pakistani households hold 300 to 500 tons of gold, worth Rs11 trillion to Rs19 trillion, with only a small share pledged through formal channels. Prices are moving. Business Recorder reported two sharp jumps in the local gold price this week, Rs13,900 and Rs9,600 per tola. Rising gold lifts collateral values. A fall would push the other way, and gold-backed lending is where the bank expects to put most of the IPO proceeds.

Reading day one

Bids covered about 80% of the book-building portion by the end of Thursday. Bidders can raise their bids until 5 pm on the final day but cannot lower or withdraw them, so the second day can change the picture quickly.

For comparison, Ghani Dairies’ book-building in February drew Rs5.8 billion in bids for a Rs1.88 billion issue, 3.1 times oversubscribed, and priced at Rs33 against a Rs24 floor. ABHI has not shown that kind of heat on day one, though the final tally is not in yet.

The backdrop is friendly. The KSE-100 sits around 175,000 after a near 2% gain in a single session this week, and one report puts growth in the PSX investor base at 47.3% over ten months.

On the prospectus’s own per-share figures (trailing earnings of Rs2.24 and book value of Rs3.00, both counted after the Rs2 billion advance converts into shares), the floor price works out to roughly 6.7 times earnings and 5 times book value. The cap price works out to about 10 times earnings and 7.5 times book value. That is our arithmetic. The lead managers lay out their valuation case in Section 4A of the prospectus.

What to read before bidding

The prospectus is candid about its weak spots.

• Track record. The cover warns that the bank lost money in 2024 and has no consistent record of profitability over the past two years.
• Going concern. The previous auditor flagged material uncertainty over capital and minimum capital compliance in the 2023 to 2025 accounts, without qualifying its opinion. The new auditor, Baker Tilly Mehmood Idrees Qamar, raised no going concern issue in the June 2026 accounts. The bank switched auditors after its assets passed Rs100 billion.
• Deposit concentration. The top 100 depositors held Rs38.46 billion, or 55.67% of all deposits, at the end of 2025.
• A gold fraud case. At the Satellite Town branch in Rawalpindi, fake gold ornaments were pledged against 55 loan accounts. Rs62.69 million in principal is outstanding. The bank has claimed Rs82.05 million from its insurer and holds Rs350 million in voluntary provisions.
• Dilution. The Rs2 billion advance converts into 200 million new shares by December 31. The 13.65% stake IPO buyers get is measured before that conversion. Once the new shares are issued, the same 132 million shares equal about 11.3% of the bank, on simple arithmetic.

What it means for Pakistan’s startup ecosystem

The IPO is a fresh issue. The sponsors sell nothing, and ABHI (Private) Limited, the venture-backed parent that moved its global headquarters to Abu Dhabi in 2024, stays private while holding 63.66% of the bank after listing. What the listing adds is a public price for the bank, set by the market.

Startups are part of the bank’s distribution. Merchant financing runs through partners including DigiKhata, Run Courier, Dastak Logistics, TruckItIn and Orio. On the DigiKhata and Run Courier arrangements, the prospectus describes loans priced at 36% with a 50% revenue share. Earned wage access is live with employers such as Gul Ahmed, Artistic Milliners, Lucky Textile and Soorty. For Pakistani B2B startups with a merchant base, embedded lending is a revenue line that a licensed bank is now actively looking for.

Four lessons for founders stand out:

1. A license can be bought. The State Bank approved ABHI’s acquisition of FINCA on November 11, 2024, and the deal closed on January 17, 2025. Two years after the approval, the bank is in the public market.
2. Asset quality sets the pace. Cutting non-performing loans from 10.23% to 0.61% is what turned losses into profit.
3. Know which product pays the bills. Gold funds the earnings today, while digital products carry the growth story. Investors will ask about both.
4. Read the regulatory runway. The plan leans on relaxations that expire in October 2027 (capital) and November 2029 (gold cap).

The strike price comes out of Friday’s close, and the retail window follows on November 12 and 13. Whatever the number, the prospectus has handed Pakistan’s startup community an audited, line-by-line look at what a venture-backed fintech’s bank earns, where it earns it and what could go wrong.

This article is for information only and is not investment advice. Read the full prospectus, especially Section 5 on risk factors, before bidding.

Sources: ABHI Microfinance Bank prospectus (October 30, 2026), Business Recorder (November 5, 2026), Profit by Pakistan Today, Arab News, Dawn and PSX notices. US dollar figures use an exchange rate of about Rs277 to the dollar.