Popular ethnic wear brand FabIndia is likely to file the draft red herring prospectus with market regulator SEBI for its initial public offering (IPO) before the month-end. The company aims to raise up to Rs 4,000 crore through its IPO, according to a Livemint report.
The report adds that the shareholders of FabIndia approved the IPO proposal at a meeting on December 18. Several Fab India investors have also decided to sell a part of their stake.
The company has a battery of investors - including PI Opportunities Fund, Bajaj Holdings and Investment Ltd, Axis New Opportunities, India 2020 Fund II Ltd, Kotak India Advantage Fund, Azim Premji’s private equity fund PremjiInvest, Infosys co-founder Nandan Nilekani and his wife Rohini Nilekani, Rekha Menon, chairperson, Accenture, and Sanjeev Bikhchandani, founder of Info Edge.
However, promoters own a 49 percent share in the company. A spokesperson for FabIndia declined to comment.
However, a person aware of the development told Livemint that the 60-year-old company plans to raise Rs 250 crore in fresh capital to expand its store network and scale its e-commerce platform.
The source added that FabIndia currently receives 10-15 percent of its sales from its e-commerce business and the company wishes to grow its online presence. Meanwhile, the company also plans to add stores in view of the increased footfall after the COVID-19 pandemic.
According to a September 2020 credit rating report by Crisil, FabIndia recorded a revenue of Rs 1,457 crore and a profit of Rs 101 crore in 2019-20.
In the past few years, FabIndia, which is known for its ethnic wear collection, has entered new product categories such as home and lifestyle, personal care and organic food. It also runs a subsidiary - Fabcafe - where it serves food made using locally sourced organic ingredients for urban consumers. Besides, the company recently launched its personal care range - Fabessentials.
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