Khaadi Pakistan gets initial long-term AA- rating as it readies for IPO

Mettis Link News reported that the Pakistan Credit Rating Agency has granted Khaadi Pakistan Limited, formerly Khaadi Pakistan SMC Pvt Limited, a first-time long-term rating of AA- and a short-term rating of A1. Both grades carry a stable outlook and reflect the position as of October 9, 2026. The agency pointed to the fashion retailer's strong sponsors and its footprint of 31 domestic outlets, 11 overseas stores, three fulfilment centres and an e-commerce channel.

Moving away from wide expansion, the retailer is converting its stores into bigger, experience-focused formats of up to 45,000 sq ft, and 18 of its 31 domestic shops have been upgraded already. Further expansion will be funded through internal resources and IPO proceeds. Net sales came to Rs17.08 billion over 6MCY26, a 35.9% rise after period adjustment, and exports represented 10.61% of gross sales.

Debt service coverage dropped from 3.8x in CY25 to 1.4x, a level still seen as adequate, after a shift to long-term borrowing raised near-term repayments. Liquidity remains thin amid heavy investment outlays and dividend payouts, while efficient supplier credit supports working capital. Khaadi acquired the rights to use the brand from its parent for Rs8 billion, with payment due on request after a 12-month grace period, a structure the report does not regard as a financial strain.