The record-breaking performance of the Pakistan Stock Exchange (PSX) is drawing companies back to equities, setting up what bankers say could be a banner year for initial public offerings (IPOs) in 2026, reported Bloomberg on Wednesday.
According to the report, two of Pakistan’s leading investment banks – Arif Habib Ltd. and Ktrade Securities Ltd. – have a combined pipeline of 16 IPOs over the next seven months. The PSX benchmark KSE-100 Index has gained over 47% this year, emerging as one of the best performers in the world. “With valuations now reaching long-term averages, offerings are set for a comeback,” read the report. “Current market valuations are attractive for raising equity,” Shahid Ali Habib, chief executive officer at Arif Habib, told Bloomberg, who expects to bring as many as eight IPOs through June.
The CEO termed currency stability and a favourable interest-rate environment as “strong tailwinds” for capital markets.
According to Habib, some companies, including consumer, pharmaceutical and auto, are tapping the equity market to help fund plans to increase production capacity, as they expect a pickup in economic growth. Meanwhile, Ktrade Securities expects to manage public offerings of six companies in the coming six months, said Chief Executive Officer Khalil Usmani.
According to Habib, companies in the pipeline include Service Long March Tyres Ltd., which is set to raise as much as Rs6.5 billion Pakistani by April.
“Saraaf, a commodity sourcing startup that raised Rs1.5 billion in Shark Tank in 2024, is also planning to come to market, and Matco Foods Ltd. plans to spin off its Falak Foods unit,” Omar Salah Ahmed, a managing director at Ktrade, told Bloomberg.
“I think it’s very likely 2026 to be a record year for IPOs,” Ktrade’s Ahmed said. “Valuations are finally becoming attractive for sponsors to actually consider listing their entities.”
As per the report, the KSE-100 was up more than 300% over three years; however, the market is showing “signs of overheating”, as the index is trading at nearly 8x forward earnings, compared to the long-term average of about 6.4x.a
Meanwhile, Bloomberg noted that foreign investors have been net sellers in nine of the past 11 years at the PSX and pulled $321 million from Pakistan in 2025, the most since 2021.