What is going on with the Pace stock price increase?

Before Packages, Emporium, and Dolmen, Lahore had Pace. In the early 1990s, shopping in Lahore was based on sprawling specialised markets. The concept of a single large location melding fashion retail and entertainment had not taken root. 

Salman Taseer thought that was ridiculous. In 1995, he launched Pace shopping mall at Main Boulevard Gulberg in Lahore. He did not just build some shopping center. This was a large, modern, centrally air conditioned shopping mall that immediately attracted the fascination of Lahoris. They were coming to check the place out in droves and the demand to get shops there was high. 

And as with everything Salman Taseer did in life, the plan was to go back. The late governor’s plan was not just to build a plaza and make a good amount of it. He wanted to build malls like this all over the country. The project was carried out by Pace (Pakistan) Limited and went on to become an icon of the city.

But the Pace that exists today is a sorry shadow of its former self. The building sort of still exists — right next to Hafeez Centre its famous triangle facade is still visible but it is in a dilapidated state. Years of neglect, boycotts, fires, family feuds, and bigger, shinier malls emerging in Lahore have left it an empty relic of what could have been for the Taseer family. 

For more than two decades now, Pace’s finances have been suffering year after year. Losses became a constant and equity soon began to erode. The family’s patriarch’s tragic death by assassination exacerbated the problems. A social boycott based on religion hurt Pace. With drying up funds and liquidity, there was nothing that could be done in order to procure contracts and jump start the revenues. While this was happening, the creditors also started to knock on the door to get back their loans. 

A flux of the new malls in the city like the Mall of Lahore, Vogue Towers and Xinhua Mall started popping up in the early 2010s onwards. The crux of the problem at Pace was that it was still looking to sell shops as the primary product while the new malls were going towards a renting out model. This led to Pace falling out of favour and seeing a decline in its popularity. 

Any signs of recovery or revival were finally put to rest when a massive fire broke out in 2022 which destroyed shops and caused significant structural damage. This was followed by another fire in 2024. The mall now exists as a cursory tale and a skeleton of its former self.

The entire history of Pace is an unfortunate story of what could have been. But if it is so done and dusted, why is their stock price going up? Since August 2025, the share price of the company has gone from Rs 6 to Rs 30 in a span of two months. The sudden increase has come on the back of positive developments as the company looks to leave its troubled past behind. But is the recovery based on credible information or is the market being too optimistic? Profit tries to give a dose of realism to the new found elation surrounding Pace Pakistan.

The beginning

The cornerstone for Pace Pakistan and the whole business empire around this group was set by Salman Taseer. Born in 1944, Taseer faced tragedy early in his life when his father passed away when he was just 6 years old. After finishing his primary education at St Anthony’s and Government College, Taseer went to London to pursue accountancy. After becoming a certified chartered accountant, he felt that he could start his own accounting firm in Pakistan and UAE. This was the start of Taseer Hadi which later partnered with KPMG. The lasting legacy of Taseer was that KPMG Pakistan is still known as KPMG Taseer Hadi & Co.

Having unparalleled success, he got the confidence to start new ventures which culminated in Pace Pakistan in 1992 and a brokerage house by the name of First Capital Securities in 1994. By 2001, he had also established Media Times Limited which had Daily Times and Aaj Kal as its primary daily publications. These were supplemented by Sunday Times and TGIF which were its weekly magazines. With the explosion of television channels in the country, it also established Business Plus and Zaiqa as its two owned channels.

The real success for Taseer came in 2001 when he created Worldcall Telecom which was the pioneer in terms of cable television and broadband internet service provider in the country. The rapid success and growth meant that the company soon became the second largest telecommunication based company just behind the state owned Pakistan Telecommunications Company Limited.

The group kept going strong, shown by the fact that it was able to sell its 60% stake in Worldcall to Omantel in 2008 worth $210 million. In 2008, Salman took the oath of governorship of Punjab and seemed to have given up control over his business endeavors. The downfall for his business group started in 2011 when he was shot by one of his own bodyguards for taking a stand for a Christian woman accused of blasphemy. This was the start of the spiral downwards of the whole business group.

Focus on Pace Pakistan

Pace Pakistan was founded in 1992 and was seen as the first open-plan retail mall in Lahore. As the company started to expand its footprint, subsequent malls were opened in Gujrat, Gujranwala and Karachi. As the company kept on growing, it developed Pace Barka Properties which was looking to develop Woodlands housing scheme and a 25 acre Pace Circle project which would have mixed usage. In addition to that, it developed the Pace Super Mall on M.M Alam Road as its flagship mall and also bought minority interests in Pace Tower and Peacock Valley Hotel and Resort near Muree.

The idea at the heart of the business was to establish malls all over the country. In the time when the first mall was constructed, the mall business used to follow a buyer based model. The real estate developer would construct the building and would then sell the shops to the companies. As the project would be nearing completion, the developer would be able to recoup some of this investment outlay even before the shops were completed which meant that they would start to see cash inflows before they had to inject all of their investment into the project. 

The best part of this model was that the project would require only a substantial part of investment to be committed by the developer. Once the shop was handed over, the responsibility of the developer was to maintain and service the shops and the mall.

In case the shopkeeper ever wanted to leave, they would have to find a buyer to take it off them as the developer would have no such obligation to buy it back off them. Pace was able to use this model to show high revenues and sales over time as this was the way business was carried out. Using it, Pace was able to expand rapidly and grow in size and stature.

However, this idea was becoming stale over time. Shopping malls are a fad as much as they are a place of business. When consumers see newer versions, they want to leave the old and start visiting the new. In the early 2000s, malls like Mall of Lahore, Xinhua Mall and Vogue Towers were becoming the new thing. These malls provided a new landscape, better shopping experiences and had cinemas. The consumer craved something new and that was not being provided by the old.

Just when Pace was getting over the shock of being out of fashion, the rental model started to be seen in the country. Malls like Emporium in 2016 and Packages Mall in 2017 started to come up with an option to rent. Brands were being given flexibility to rent their shops rather than buy them. This meant that they could rent the space, build their shops and then gauge their success. In case their shops lacked to generate interest, they could easily leave and stop making their rental payments.

The new model also made it the responsibility of the mall to generate footfall to get more customers by carrying out promotional activities at different occasions. This reduced the onus on the shops themselves to make the customer visit and carry out promotions by themselves. This proved to be the final nail in the coffin of the company which was already reeling from the death of its founder.

The fall at Pace Pakistan

In order to understand the fall at Pace Pakistan, the analysis can be carried out from 2002 onwards. Around that time, net sales stood at Rs 2 crores  which kept increasing to Rs 61 crores by 2007. The same pattern of growth was seen in gross profits which went from Rs 40 lakhs in 2002 to Rs 23 crores in 2007. To truly understand the growth, the net profits need to be considered which rose from Rs 2 crores in 2002 to Rs 50 crores by 2007. 

The reason for net profits being greater than gross profits was due to the fact that the company was considering any increase in its investment property through its profit and loss. These gains alone stood at Rs 41 crores for 2007.

The impact of this increase in value can be seen in the net current assets going from Rs -10 crores to Rs 1.3 billion by 2007. Similarly, shareholders’ equity also increased from Rs 26 crores in 2002 to Rs 3 billion in 2007. Earnings per share were only Rs 0.18 per share in 2002 which increased to Rs 2.78 by 2007.

The year 2008 proved to be the peak for the company as it saw sales of Rs 1.5 billion with net profits of Rs 1.4 billion. This year saw the company declare an earning per share of Rs 6.36 as its break up value touched the high of Rs 20.69 per share. The next two years were profitable as well with net profits of Rs 44 crores and Rs 63 crores respectively. To some extent, it could be seen that the company had touched new heights based on its profitability and revenue generation.

In 2011, the company registered negative net sales. This was due to the fact that the company was only able to make sales of Rs 37 crores and saw reversal of sales of Rs 85 crores. These reversals of sales took place as the agreements between the buyer and the Group had been cancelled as per mutual agreement which had been sold in the past. 

Due to these negative sales, the company ended up suffering a loss after tax of Rs 2 billion leading to a loss per share of Rs -7.46 per share. With the property being written down as well, the balance sheet started to take a bartering. By the end of 2013, gross losses and net losses had become a constant as shareholders equity fell to Rs 2.4 billion after seeing a high of Rs 6.5 billion in 2010. Similarly, net current assets also became negative as current liabilities began to pile up against assets that were losing their worth. 

Things stayed the same from 2014 to 2021 as sales barely crossed the Rs 1 billion mark and losses were seen. In 2022 and 2024, Pace was able to register net sales of Rs 1.4 billion and Rs 2 billion respectively, however, this was not able to gloss over the losses that the company had been suffering. By the end of 2023, the situation was very dire as the company had suffered loss per share of Rs 6 yet again which came to Rs 1.7 billion worth of losses for 2023.

The accumulation of losses had converted shareholders’ equity to Rs -1.7 billion and net current assets stood at Rs -5.2 billion as well. The only ray of sunshine seen in 2024 was that the foreign currency convertible bonds issued by the company had actually not suffered an exchange loss due to depreciating currency. This came in at around Rs 1.4 billion in 2023 which caused the primary loss in 2023. In 2024, this loss actually turned into a small gain leading to profit for the year.

The stock market looks optimistic

Based on the performance of the company, it could be seen that it was suffering to raise revenues and profits and there was little in the way of hope for things to get better. In the period from the listing of Pace in 2007, it was seen that the share price hovered around Rs 40 in 2008 in line with its financial performance. In the wake of the assasination and deteriorating performance, the share price fell below Rs 5 and barely managed to cross the threshold of Rs 10. It was only recently that the share price skyrocketed from Rs 6 to Rs 30 in a matter of a few months. 

So why the sudden change?

On August 29th 2025, the market was notified that the board had approved the company to convert its Term Finance Certificates worth Rs 1.1 billion into equity which would translate to around 12 crore additional shares. This would mean that each share would be against a consideration of Rs 9 per share. In addition to that, the authorized shareholding would be increased from Rs 60 crores to Rs 1.8 billion in order to accommodate for the increase in shares that will take place.

The purpose of this would be that it would decrease the burden of the debt on the company and decrease its finance cost going forward.

By 7th November 2025, another notification was shared with the market stating that Pace was going to sell its shareholding of 56.79% in Pace Super Mall which was located on the Main Boulevard Gulberg. This would mean that they would be selling their almost 1 crores shares to First Capital Securities for a consideration of Rs 45.3 crores. The asset was worth around Rs 9 crores and was being sold for a gain of Rs 36.2 crores. Another great piece of news for the languishing real estate firm. 

Lastly, Pace also announced that it would be purchasing a plot in Dubai to develop a commercial project and another subsidiary company was going to be incorporated in Dubai in line with this.

Is the price increase justified?

On the face of it, all these developments justify the price increase. The restructuring was going to benefit as it would reduce the finance cost while the sale of the mall at a gain would provide much needed funds to finance new projects. The incorporation in Dubai would also open doors to new investment opportunities.

It is only when a closer look is taken when the red flags start to be raised. First Capital Securities was established as an investment vehicle which would invest in long and short term investments and carry out money market operations in conjunction with financial consultancy services. Over its life, the investments of First Capital spanned an investment advisory company, a publishing house, brokerage houses and a water purification service. It was also able to invest in Lanka Securities which was a brokerage house based in Sri Lanka. In addition to this, it also had small shares in Pace Barka properties, Pace Super Mall and Media Times.

In 2001, First Capital only managed revenues of Rs 8 crores netting in a profit after tax of Rs 9 crores. Most of the gain was seen in the upward revaluation of its investments that it carried out each year. By 2008, operating revenues of the company had grown to Rs 5.6 billion and profits had mirrored this increase ending at Rs 5.4 billion for the year. This was primarily a blip that was seen due to revaluation of its investments. After 2011, the company started to suffer consistent losses as its investments lost value while other sources of income dried up.

By the end of 2024, much of its source of income through money market operations, financial advisory and other operations had ended. The only source of income left on its books was the dividend it was receiving from Lanka Securities while it took into account any revaluation of its investments. As the losses kept piling up, the company had Rs 1.4 billion worth of accumulated losses on its books. The only thing going for the company was the fact that its investments were gaining value which made sure that equity would not become negative.

As the losses became a leakage on its liquidity, long term loans had to be taken in order to fund the working capital of the company. The profits being earned were primarily unrealized which meant no cash was being generated. In order to cover its expenses, the company had to take on liabilities. One mark of this lack of liquidity was that the accrued markup stood at Rs 1.5 billion at the end of 2024.

Based on the losses made by the company, the auditors felt that the going concern assumption was coming under threat as the current liabilities outpaced its current assets by Rs 2.6 billion. The dire situation was acknowledged by the company itself where it stated that the losses and net current assets being in the negative region was a cause of concern that needed to be addressed. 

In light of this, the management was negotiating a business plan and talking to its third party lenders for the sale of pledged investment properties which could be used to settle any principal and accrued markup that was pending.

Considering how bad things had gotten, 2025 proved to be the much needed relief that was needed as the accounts showed that earning per share of Rs 3.75 had been achieved in a space of a year. The only problem was that the source of these profits were again in the air more than the ones being realized. A year ago, dividend income of Rs 4 crores was earned due to Lanka Securities. This year, only income of Rs 6 lakh was realized from the brokerage house. A gain of Rs 1.5 billions was being realized from the reevaluation of its investments. Rather than the profit having any credence attached to it, this was a gain in the books primarily leading to the profits being earned.

These gains were being translated to the balance sheets with the assets increasing by the same amount. While the gains were on paper alone, the accrued markup and current portion of the loans kept increasing as they were not being made but only accommodated for. The lack of cash flow being the culprit yet again.

So the question is raised, how can a company going through such dire circumstances be able to invest in a new property when it is not even able to pay its principal and markup on a yearly basis. Especially for a company which had net current assets in the negative region in excess of Rs 3.1 billion. With little cash and short term assets on hand, how will the consideration of Rs 45 crores be paid for?

The alarm bells start to ring a little louder when the notes of the latest accounts are considered. The investment properties are valued at Rs 4.3 billion. What has not been disclosed anywhere earlier in the accounts is that Rs 3.4 worth from these assets are leased properties while only Rs 97 crores worth are owned by First Capital. 

Moving down the notes, the biggest revelation is made where it is stated that none of the investment property is in the name of First Capital as these properties are held in the name of Pace, First Capital Equities, Capital Heights and Pace Bark Properties. It does state that they have the control and possession of these properties none the less.

So the fixed assets of First Capital are not under its own title and are mortgaged against the borrowing that they have carried out. They have barely been able to pay their interest or principal in the recent past. The losses that are being made are only being helped by gains and profits that are in the books as they are unrealized gains and revaluation of its investments and property. Lastly, there is little to no cash to speak off which can be used to pay off Pace against the sale made. All indicators point towards the fact that the financial situation at First Capital is tenuous..

The primary task of First Capital was to invest in different opportunities that it thought were profitable and would yield benefits in the future. The only problem here is that it is buying an asset which is long past its prime, is in dilapidated condition and needs a revamp in order to bear fruit in the future. Such a project can prove to reap benefits if the effort and resources are put into it. 

The issue here is that it is being bought by a company which is already on a shoestring in terms of resources. For First Capital to rehabilitate such a property looks improbable if not impossible for now. The fact that Pace Pakistan is selling this property can prove beneficial for itself while it can prove to be a further burden on First Capital. For now, Pace Pakistan seems to be on the mend, however, it could come at the cost of another.