ABHI Microfinance Bank Plans IPO to Raise Rs 2 to Rs 3 Billion on PSX

ABHI Microfinance Bank IPO Details and Share Offering

ABHI Microfinance Bank plans to raise between Rs 2 billion and Rs 3 billion through an initial public offering of 132 million ordinary shares on the Pakistan Stock Exchange, with a floor price of Rs15 per share. According to details disclosed to the stock exchange, the book-building process will take place on November 5 and 6, while the retail subscription period is scheduled for November 12 and 13. The offering represents a major step for the institution as it seeks public equity participation and expansion capital within the domestic financial sector.

The book-building portion comprises 99 million ordinary shares, representing 75 percent of the total issue, at a floor price of Rs15 per share, including a premium of Rs5 per share. The price band allows a maximum increase of 50 percent, taking the upper price limit to Rs22.50 per share. The general public portion of the offering will be fully underwritten by Arif Habib Limited, Topline Securities Limited, Growth Securities (Private) Limited and Dawood Equities Limited.

Use of Proceeds and Capital Adequacy Ratio Improvement

At the floor price, the bank expects to raise gross proceeds of Rs1.98 billion, which will primarily be used to expand its loan portfolio and strengthen its capital base. The proposed equity injection is expected to improve the bank's capital adequacy ratio, support balance-sheet growth and help it meet the minimum regulatory capital requirements prescribed by the State Bank of Pakistan for microfinance banks. According to the bank's projections, the IPO proceeds will help address its capital shortfall and bring its capital adequacy ratio closer to the regulatory threshold. The bank's projected profitability over the following two years is expected to further strengthen its capital position and support compliance with regulatory requirements.

The bank has continued to report profits in 2026 as the management estimates a profit of approximately Rs1.5 billion in the second half of calendar year 2026, taking the projected full-year profit to around Rs3 billion. The bank's forecast puts its 2026 profit at Rs2.927 billion. The bank expects its capital adequacy ratio to turn positive and reach approximately 4.3 percent by the end of 2026, following the addition of IPO proceeds and projected earnings, before accounting for other capital adjustments.

Profitability is projected to improve further in 2027, adding to retained earnings. Combined with other routine regulatory capital adjustments, this is expected to lift the capital adequacy ratio to 17.8 percent by the end of 2027, above the central bank prescribed minimum of 15 percent for microfinance banks. These financial projections highlight the management strategy to restore capital health and maintain compliance with statutory frameworks governing the microfinance sector.

Operational Reach and Financial Product Portfolio

ABHI Microfinance Bank operates through both branch-based and branchless banking channels. Supported by a technology-enabled digital platform and a network of more than 114 branches across over 108 cities, the bank offers a range of financial services throughout Pakistan. Its portfolio includes secured lending products such as gold-backed loans; digital lending solutions, including earned wage access, salary-backed lending and advance salary financing; merchant financing; and microenterprise lending for businesses operating in the agriculture and livestock sectors. This hybrid operational model allows the institution to serve both urban salaried workers and rural micro-entrepreneurs.

Ownership Structure and Corporate Background

According to disclosures shared with investors through the stock exchange, ABHI (Private) Limited holds a 73.73 percent stake in ABHI Microfinance Bank, while TPL Corp Limited owns the remaining 26.27 percent. The backing of these parent entities provides structural support as the bank undertakes its public listing. Public market participation will dilute these private holdings while introducing external institutional and retail shareholders into the governance structure.

Regulatory Compliance in the Microfinance Sector

Microfinance banks in the country operate under strict regulatory oversight by the State Bank of Pakistan, which mandates specific capital adequacy ratios to absorb potential loan losses and protect depositors. Meeting these requirements is mandatory for continued operations and portfolio expansion. The capital injection from the share issuance directly targets the current capital shortfall, positioning the bank to resume normal credit creation and lending activities without regulatory penalty or restriction.

Underwriting and Market Reception

The involvement of prominent financial institutions as underwriters for the retail portion provides market assurance regarding the successful completion of the share offering. Arif Habib Limited, Topline Securities Limited, Growth Securities (Private) Limited and Dawood Equities Limited form a consortium responsible for ensuring the subscription of the general public shares. Their participation reflects institutional confidence in the underlying assets and growth trajectory of ABHI Microfinance Bank despite recent capital pressures.