Lifestyle retail brand Fabindia on Monday, February 27, said it has withdrawn its Rs 4,000-crore initial public offering (IPO) due to the current market conditions.
This comes after the popular jeweller Joyalukkas India Ltd withdrew a Rs 2,300-crore IPO. The date for the IPO was expected to be announced early in 2023.
"Fabindia withdrew its DRHP for a public listing, the validity of which was to end in April 2023. The decision to withdraw was taken as the current market conditions were not seen to be conducive for the listing of our size," an official spokesperson said.
In January this year, the company filed the Draft Red Herring Prospectus (DRHP) with market watchdog Securities and Exchange Board of India (SEBI) for the offer that would have included a fresh issue of shares worth up to Rs 500 crore. This was in addition to an offer for sale (OFS) of up to 2,50,50,543 shares.
Also, the company said the withdrawal of the DRHP will allow Fabindia to explore other options for liquidity. The company may reconsider filing an IPO in the future, depending on its need for growth capital and prevailing market conditions.
"We strongly believe that the Indian consumer story is going to be the engine that drives the world economy. We have seen record sales this year, with a 40 percent YoY growth in our business. This is our highest growth ever," the retailer said.
"Several leading global ESG-focused funds have expressed keenness to invest in us. They appreciate our strong ESG track record of more than six decades and believe in our business model, which is based on ESG values," the company said.
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In order to "reward and express gratitude to certain artisans and farmers engaged with the company or its subsidiaries", Fabindia's two promoters — Bimla Nanda Bissell and Madhukar Khera — intend to transfer 400,000 shares and 375,080 shares, respectively, to them, subsequent to the filing of the DRHP.
"Our promoters, namely, Bimla Nanda Bissell and Madhukar Khera have opened their respective demat accounts and have transferred 400,000 equity shares and 375,080 equity shares, respectively, that are proposed to be transferred by way of gift to the artisans and farmers," the DRHP said.
Proceeds from the fresh issue of shares will be utilised for voluntary redemption of the company's NCDs (non-convertible debentures), pre-payment or scheduled re-payment of a portion of certain outstanding borrowings and general corporate purposes.
In the DRHP, the company underscored its ESG (environmental, social and governance) initiatives, saying it believes in "enabling and uplifting the people we work with, taking care of the environment, and being ethical in our conduct with have a long and lasting positive impact."
"We have aimed to create social impact and foster economic well-being for our artisans, communities, employees and investors, using environmentally responsible and ethical means," it added.
ICICI Securities Ltd, Credit Suisse Securities (India) Pvt Ltd, JP Morgan India Pvt Ltd, Nomura Financial Advisory and Securities (India) Pvt Ltd, SBI Capital Markets Ltd and Equirus Capital Pvt Ltd are the lead managers of the issue.
