AdalFi gets paid only when a bank's loans perform, and 97 percent of its revenue comes from group companies

In July 2021 two Pakistani banks, Bank of Punjab and Allied Bank, began offering salary advances through software built by a company incorporated only weeks earlier. Five years later that company, Adal Fintech, known as AdalFi, has put a draft prospectus before the Pakistan Stock Exchange. It shows a business that earns about Rs0.90 on every Rs100 of lending it helps banks make, turned profitable only in 2025, and still books 97 percent of its revenue from group companies.

A lender's engine, paid on performance

AdalFi is not a lender. The partner bank stays the lender of record, funds the loan and holds it on its balance sheet. AdalFi supplies the pieces around the decision: a score built from a borrower's actual account cash flows rather than bureau history, the digital journey that collects consent, and the connection to the bank's core system that disburses the money. The scoring models, the prospectus says, were trained on more than 2.5 billion bank transactions. At Bank of Punjab the company says it cut the time from decision to disbursement from about five days to 60 seconds.

The unusual part is the price. AdalFi charges no licence or implementation fee. It takes a share of the bank's net income on the loans it originates, measured after the cost of funds and after the principal of loans that go bad is stripped out. A defaulted loan therefore earns AdalFi nothing and it carries part of the loss beside the bank. The share itself is set bank by bank and the draft does not disclose it, so the best available measure is revenue against lending volume. In 2025 the platform enabled Rs45.6 billion of loans and local revenue was Rs409.17 million, about 0.90 percent. In the first half of 2026 it was Rs281.29 million on Rs27.8 billion, about 1.01 percent. In 2024 the figure was 0.61 percent on Rs14.9 billion. The rise reflects the model compounding: term loans run for one to four years and keep paying a share after the year they were written.

Over its life the platform has enabled more than Rs90 billion through 750,000 loans to 130,000 borrowers, an average loan near Rs120,000 and about six loans for each borrower. AdalFi reports a 90 day default rate of about 0.2 percent. The prospectus sets that against a 3.5 percent baseline for conventionally underwritten bank lending but gives no source for the baseline. The book is also young and growing fast, so many loans have not yet had time to default.

Three years of losses, then a profit

The early years were funded by the parent. AdalFi lost Rs128.52 million in 2023 and Rs89.89 million in 2024, and its gross margin was zero in 2024. In 2023 the parent, Adal Financial of Singapore, which owns the platform's intellectual property, was also the main customer: Rs121.28 million of the year's Rs151.27 million revenue was development work billed to it. That export revenue was Rs150.44 million in 2024 and Rs157.74 million in 2025 while the domestic business grew around it, and its share of revenue fell from 80 percent in 2023 to 29 percent in the first half of 2026.

Revenue reached Rs241.15 million in 2024 and Rs566.92 million in 2025, up 135 percent, and Rs394.36 million in the first half of 2026. Profit after tax was Rs107.71 million in 2025, the first profitable year, and Rs114.77 million in the first six months of 2026. Cash tells a more careful story. Operating cash flow in 2025 was Rs21.46 million, about a fifth of profit, because average receivable days rose from 44 to 68. In the first half of 2026 it recovered to Rs173.49 million, more than profit.

One bank, one corporate family

Two concentrations stand out. Bank of Punjab produced Rs388.56 million of revenue in 2025, 68.5 percent of the total and 95 percent of domestic revenue. The other eight banks live on the platform together produced about Rs20.6 million. The prospectus expects Bank of Punjab's share of lending volume to fall to about 86 percent in 2026 and below 60 percent later, as United Bank, JS Bank, Askari, Allied and the newer partners MCB and Bank AL Habib scale up.

The second is the group. Revenue from related parties was Rs552.65 million in 2025, about 97 percent of the total. Some of it is the export work for the parent. The rest is domestic: the Bank of Punjab and Allied Bank contracts predate the company, so those banks pay Techlogix Pakistan, the engineering group founded by AdalFi's chief executive Salman Akhtar and Kewan Qadre Khawaja, which passes the money on within two business days at no profit and no loss. At 30 June, Rs83.25 million of Rs101.38 million in trade debts was owed by related parties. The draft says the contracts are expected to move to AdalFi directly.

The licence adds a third layer. AdalFi uses the platform under an exclusive, irrevocable licence from the Singapore parent, which survives a change of control. It pays nothing until local revenue passes Rs2 billion, then 5 percent, rising in steps to 10 percent above Rs6 billion, and the forecast shows a first payment of Rs108.48 million in 2029. Investors in the offer are buying the licensee, not the owner of the platform.

What the offer asks investors to believe

The offer is 50,160,003 new shares, 10 percent of the company after listing, at a floor of Rs8.75 and a ceiling of Rs13, with Arif Habib as lead manager. At the floor that raises Rs438.9 million and values the company at Rs4.39 billion, or Rs6.52 billion at the ceiling. The money is 1.3 times the Rs340.09 million of equity at 30 June and 3.4 times its Rs128.59 million of cash. The sponsor keeps 90 percent, leaving a free float of 10 percent against 35 percent at Tasdeeq, the credit bureau the draft uses as its only listed comparison.

The draft prices the floor at 12.83 times forecast 2026 earnings, against 35.35 times for Tasdeeq and 7.21 for the KSE 100. That multiple rests on a second half twice as profitable as the first: the forecast profit of Rs342.14 million needs Rs227 million after Rs114.77 million in the first six months. It also needs lending of about Rs46.5 billion in the second half, roughly Rs7.75 billion a month, against Rs27.8 billion in the first half and a monthly rate that passed Rs5 billion in late 2025. If the second half only matches the first, profit is about Rs230 million and the floor is 19 times earnings. The profit is also untaxed: AdalFi is a Special Technology Zones Authority enterprise with a full tax credit until 30 June 2031. The forecast shows tax of Rs444.46 million on Rs2.40 billion of profit in 2031, 18.5 percent, and at that rate the 2026 multiple at the floor would be about 15.7 times. Option grants add a smaller cost: 36.6 million options, 7.3 percent of the post offer shares, with most granted at Rs3.

A supplement stating the strike price is due within one working day of the close of bidding. Bidding dates have not been announced, and the document is still a draft.