Mahaana, the digital investment platform, has launched Mahaana Gold, a digital investment option designed for people who want exposure to physical gold without having to purchase, store and secure the metal themselves. The product is structured through the Mahaana Islamic Gold Fund (MIGF), an open-end Shariah-compliant scheme that invests in deliverable physical gold rather than using a paper contract that simply follows the price of gold. The offering is aimed at people who view gold primarily as a savings or investment instrument rather than jewellery for personal use. Through the digital structure, investors can build their gold position in smaller amounts while the underlying asset remains physical gold held through the fund structure.
The offering opened with a minimum investment of Rs. 10,000, while subsequent investments can be made with amounts starting from Rs. 5,000. The IPO is scheduled to close on September 10 at 4:00 PM, with subscriptions being accepted through the Mahaana app. Units are expected to be allotted on September 11 at a single issue price, while the offer size for the current round has been set at PKR 100 million. The allocation is being made on a first-come, first-served basis. During the IPO period, investors are not required to pay a front-end load, while a front-end load of up to 1.5% will apply after the IPO window. The structure gives investors an opportunity to enter the gold investment product digitally without the additional steps normally associated with purchasing and storing physical gold.
The underlying gold held by the fund is physical and deliverable. Mahaana purchases the gold through the Pakistan Mercantile Exchange (PMEX) and keeps the metal in a vault, meaning the units are backed by actual gold rather than synthetic exposure to movements in the gold price. The Central Depository Company (CDC) acts as trustee of the fund and keeps its assets separate from Mahaana’s own balance sheet. As a result, the gold held by the fund is separate from Mahaana’s own assets and is not available to Mahaana’s creditors. Mahaana’s role is to manage the fund, while the underlying assets remain within the fund structure. A limited portion of the fund is maintained in cash and Shariah-compliant liquid instruments to support redemption requests, allowing the fund to meet withdrawals without being forced to sell gold immediately.
The value of the gold is calculated at the end of every business day, and this valuation determines the fund’s unit price. This gives investors a published value for their holdings rather than requiring them to negotiate a price with a jeweller when they want to know what their gold is worth. The fund follows a Wakalatul Istithmar structure, under which the investor appoints Mahaana as an agent to invest on their behalf for a disclosed fee. Returns generated by the investment belong entirely to the unit holders, while Mahaana receives compensation for managing the fund instead of taking a share of the investment profit. The fund does not hold interest-bearing instruments, conventional debt or non-compliant securities, while cash is maintained in Islamic bank accounts. The fund has also been certified by the Securities and Exchange Commission of Pakistan’s Islamic Finance Department and independently by the Shariah Advisory Board led by Al Hilal Shariah Advisors, which reviews the fund’s operations on an ongoing basis.
Mahaana Gold also has a defined cost structure for investors. The standard front-end load is up to 1.5% of the amount invested at the time of purchase, although this charge is waived during the IPO period. A management fee of up to 1.5% accrues daily through the unit price instead of being charged separately to investors. There is no standard back-end load and there is no lock-in period for redemption, although a redemption made within 30 days of investment can trigger a back-end load. This 30-day condition applies across Mahaana’s products and is not specific only to Mahaana Gold. After the 30-day period, investors can redeem their units without a redemption charge. Other expenses, including trustee, custody, audit and regulatory costs, are detailed in the fund’s Offering Document.
Investors will be able to purchase Mahaana Gold units on any business day at that day’s applicable unit price. The first investment requires Rs. 10,000, while additional investments can start from Rs. 5,000. Investors seeking to withdraw their money can submit a redemption request through the Mahaana app, with the proceeds expected to reach their registered bank account within six business days. The treatment of Zakat and taxes is separately explained in the Offering Document. The digital process is intended to reduce the practical difficulties associated with purchasing and selling physical gold, while retaining exposure to the underlying metal. Instead of purchasing a fixed quantity of gold from a jeweller, investors can build their position gradually through smaller digital investments.
According to Shamoon Tariq, Chief Executive Officer and Founder of Mahaana Wealth, the main consideration for anyone considering the product should be the reason they are buying gold. He explained that people purchasing gold for weddings or personal use would still need to visit a jeweller, making Mahaana Gold unsuitable for that purpose. However, for people saving in gold or investing for the future, he argued that a gold fund can provide a more practical alternative. His reasoning is based on several issues associated with conventional gold purchases, including jewellery purity, making charges, storage requirements and the security risks connected with keeping valuable metal at home or in a locker. Jewellery is often not 24 karat, while the quoted weight can include stones and other materials that may still influence the price paid by the customer.
Tariq also highlighted the difficulties associated with purchasing gold biscuits. While gold biscuits can remove some of the issues associated with jewellery, investors still have to consider purity and the security of the physical asset. He noted that buying physical gold can also require a relatively large amount of money because jewellers generally sell gold in minimum lots of around 10 grams, with smaller quantities having limited availability. According to his explanation, this means a buyer may need approximately four to five lakh rupees to purchase gold from a jeweller in a meaningful quantity. For someone saving smaller amounts over time, the price of gold can also change before they have accumulated enough money to make the physical purchase, affecting how much gold they can eventually afford.
Mahaana Gold is designed to address that issue by allowing investors to put aside smaller amounts and gradually build an investment position linked to physical gold. Tariq gave the example of someone investing Rs. 5,000 at a time, allowing that investment to grow with the price of gold while avoiding the need to purchase, carry or store physical metal. He also pointed to the fact that gold held as jewellery in households may remain unused for long periods, meaning that people can have substantial value sitting in lockers or at home without actively using it. His argument is that people purchasing gold as a long-term savings asset can consider a fund structure, while those who specifically want jewellery should continue to purchase it from a jeweller.
Liquidity is another difference between Mahaana Gold and directly owned physical gold. According to Tariq, once units have been issued, an investor can sell them as soon as the following day. This means investors do not have to physically visit a jeweller to sell their gold. Opening an account and making an investment can take around five minutes, while the actual transaction can take approximately 30 seconds. Withdrawal requests can also be initiated digitally through the app. However, the money does not arrive immediately because the fund has to complete the gold sale and settlement process.
When a redemption request is submitted, Mahaana sells the underlying gold through PMEX and processes the proceeds through CDC. Tariq said the settlement cycle generally takes around three to four days before the proceeds reach the investor’s bank account. The wider process can therefore take several business days even though submitting the request itself is quick. Gold pricing is also based on the prevailing market price available through PMEX, meaning investors do not have to negotiate a rate with an individual jeweller. The sale is carried out using the applicable price for that day, providing a more structured process for investors seeking to exit their position.
Mahaana Gold is therefore positioned as a digital savings and investment route for people who want gold exposure without taking direct custody of physical metal. The product does not aim to replace jewellery purchases, but instead focuses on gold as an investment and savings asset. Its structure combines physical gold purchased through PMEX with digital account access, daily valuation, smaller investment amounts and a fund arrangement in which the assets are separated from Mahaana’s own balance sheet. For investors considering the product, the IPO closes on September 10 at 4:00 PM, with subscriptions available through the Mahaana app and the current offer size set at PKR 100 million. Further details on charges, Zakat, taxes and other conditions are provided in the Offering Document.
Follow the PakBanker Whatsapp Channel for updates across Pakistan’s banking ecosystem.