Fabindia Ltd, a retailer of Indian ethnic clothing, has withdrawn its initial stock sale documentation for its proposal €4,000 crore IPO amid market uncertainties.
Fabindia Ltd, a retailer of Indian ethnic clothing, has withdrawn its initial stock sale documentation for its proposal €4,000 crore IPO amid market uncertainties.
The decision to withdraw was made as current market conditions were not conducive to a listing, a company spokesman said, adding that Fabindia will now evaluate other liquidity options, including applying for an IPO in future conditions, depending on growth capital needs and the market.
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The decision to withdraw was made as current market conditions were not conducive to a listing, a company spokesman said, adding that Fabindia will now evaluate other liquidity options, including applying for an IPO in future conditions, depending on growth capital needs and the market.
“Several of the world’s leading ESG (environmental, social and governance) focused funds have expressed their willingness to invest in us. They value our strong ESG track record of more than six decades and believe in our business model built on ESG values,” the company said.
The apparel company submitted its draft IPO in January last year and received market regulator approval in April. Since the Securities and Exchange Board of India (Sebi) approval is valid for one year, Fabindia will have to file new documents when the approval expires. “We meet many investors in the market. But there’s a disconnect between the company’s valuation expectations and investors’ willingness to pay. So the IPO will start as soon as these issues converge,” said an investment banker at a state-owned bank.
Key Fabindia stakeholders include Bimla Nanda Bissell and Madhukar Khera, Premji Invest, Bajaj Holdings and Kotak India Advantage.
Several companies have opted to withdraw draft IPO papers in recent months as valuation expectations did not match investor perceptions, analysts said. Some companies are expected to postpone their IPOs to April-June to avoid market volatility.
According to Fabindia’s IPO papers, a sale was planned €500 crore in fresh shares and is offering up to 25 million shares for sale by its shareholders. The net proceeds from the IPO were to be used to voluntarily repay the Company’s non-convertible debt securities and accrued interest thereon, as well as scheduled repayments of a portion of its outstanding debt.
Established in 1960, Fabindia specializes in ethnic clothing for men, women and children, as well as home and living, furniture, food and gifts. Fabindia and Organic India are two of the company’s most well-known brands.
Meanwhile, jewelry brand Joyalukkas withdrew its design papers last week citing poor market conditions.
According to the researcher Prime Database, nearly 57 companies with plans to sell are worth shares €85,754 crore has received approval from Sebi for its IPO, while almost €Public bids worth 55,620 crore are yet to be approved by Sebi.
On the other hand, some experts said that this fiscal year could see a series of IPOs due to a trend in the IPO market.
Credit Suisse, JP Morgan, Nomura, SBI Capital Markets and ICICI Securities have been retained to manage the share sale.
Fabindia reported a loss of €39.2 crore on sales of €1,372.6 million in FY22. In FY21, it posted a loss of €117.1 crore on sales from €1,054.9 million.
Fabindia, backed by Premji Invest and Lighthouse Capital, owns a 44% stake in Organic India.
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