abhi microfinance bank targets rs 3 billion via ipo
ABHI Microfinance Bank is set to raise between Rs 2 billion and Rs 3 billion through an initial public offering (IPO) by issuing 132 million ordinary shares on the Pakistan Stock Exchange (PSX), with a floor price fixed at Rs 15 per share.
IPO Details and Timeline
The IPO will be divided into a book-building phase and a retail subscription. The book-building portion, which makes up 75 percent of the total shares or 99 million shares, is scheduled for November 5 and 6, while the general public can subscribe during November 12 and 13. The floor price includes a Rs 5 premium, and the price band permits a maximum increase of 50 percent to Rs 22.50 per share.
The offering is fully underwritten by major financial institutions—Arif Habib Limited, Topline Securities Limited, Growth Securities (Private) Limited, and Dawood Equities Limited—to ensure full subscription.
Use of Funds and Capital Enhancement
At the minimum price, the bank aims to garner Rs 1.98 billion, primarily to expand its lending portfolio and bolster its capital base. This equity infusion will help ABHI Microfinance Bank enhance its capital adequacy ratio (CAR), vital for meeting regulatory requirements set by the State Bank of Pakistan (SBP). The IPO proceeds are projected to close the bank’s capital gap, moving its CAR closer to the SBP mandated minimum for microfinance institutions.
According to the bank’s projections, profitability is on the rise with an estimated Rs 1.5 billion profit expected in the latter half of 2026, totaling roughly Rs 3 billion for the year. These profits, combined with the IPO proceeds, are anticipated to increase the CAR to 4.3 percent by the end of 2026 and further to 17.8 percent by the end of 2027, exceeding the 15 percent minimum required by the central bank.
Bank Operations and Market Position
ABHI Microfinance Bank operates through a hybrid model leveraging both traditional branches and branchless banking, supported by a tech-enabled digital platform. It maintains more than 114 branches spread across 108 cities in Pakistan. The bank’s product offering spans secured loans such as gold-backed lending, digital financing options including salary advances and earned wage access, merchant financing, and microenterprise loans targeting agriculture and livestock sectors.
Currently, ABHI (Private) Limited holds a majority stake of 73.73 percent in the bank, while TPL Corp Limited holds the remaining 26.27 percent.
Why This Matters for Pakistan
This IPO reflects the growing importance of microfinance in Pakistan’s financial ecosystem, as such institutions play a crucial role in providing credit access to underserved segments and small businesses. The expansion and capitalization of ABHI Microfinance Bank could boost economic activity in rural and semi-urban areas. Enhanced capital enables better risk management and financial product innovation, benefiting millions of Pakistanis who rely on microfinance for entrepreneurship and consumption.
ABHI’s move to go public illustrates increasing investor confidence in microfinance and digital banking platforms amid efforts to promote financial inclusion nationally.
As the IPO unfolds, it offers an opportunity for local investors to participate in Pakistan’s evolving microfinance sector, potentially fostering sustainable economic development and financial growth.
