Indian ethnic wear retailer Fabindia Limited has withdrawn the initial share sale document for its proposed 4,000 crore initial public offering amid market uncertainty.
A company spokesperson said the decision to withdraw was taken as the current market conditions were not conducive for listing. conditions.
“Several leading global ESG (environment, social and governance)-focused funds have expressed interest in investing in us. They appreciate our strong ESG track record of over six decades and believe in our business model, which is based on ESG values.”
The clothing company had filed the IPO draft paper in January last year and got approval from the market regulator in April. Since the Securities and Exchange Board of India (SEBI) approval is valid for one year, Fabindia will have to file fresh documents if the approval lapses. “We are meeting a lot of investors in the market. But there’s a disconnect between the company’s valuation expectations and what investors are willing to pay. So the IPO will be launched once these issues are met,” said an investment banker with a state-owned bank.
Key stakeholders of Fabindia include Bimla Nanda Bissell and Madhukar Khera, Premji Invest, Bajaj Holdings and Kotak India Advantage.
Analysts said several companies have opted to withdraw draft IPOs in recent months as valuation expectations did not match investor sentiments. Some companies are expected to delay their public offers till April-June to avoid market volatility.
According to Fabindia’s IPO papers, there was a plan to sell it 500 crore of fresh stock and offer of up to 25 million shares for sale by its shareholders. The net proceeds from the IPO were to be used for voluntary redemption of non-convertible debentures of the company and interest accrued thereon as well as for repayment of a part of the outstanding borrowings.
Established in 1960, Fabindia specializes in ethnic clothing for men, women and children as well as home and living, furniture, food and gift products. Fabindia and Organic India are the two most recognized brands of the company.
Meanwhile, jewelery brand Zoalukkas withdrew its draft document last week citing poor market conditions.
According to the Researcher Prime database, there are plans to sell shares of about 57 companies. 85,754 crore have got SEBI approval for their IPO, while approx. Public offers worth Rs 55,620 crore are yet to get SEBI nod.
On the other hand, some experts said that due to the trend in the IPO market this financial year, many IPOs may be lined up.
Credit Suisse, JP Morgan, Nomura, SBI Capital Markets and ICICI Securities were hired to manage the share sale.
Fabindia reported loss 39.2 crores on sales of Rs. 1,372.6 crore in FY22. In FY21, it 117.1 crores on sales of 1,054.9 crores.
Fabindia, backed by Premji Invest and Lighthouse Capital, owns a 44% stake in Organic India.