Fabindia withdraws IPO plan due to market uncertainties
- ByStartupStory | February 28, 2023
In the face of challenging market conditions, Fabindia has become the latest company to withdraw its initial public offering (IPO) plans. The fashion retailer had intended to raise $482 million through the sale of its shares. However, the company has now joined a growing list of firms that have put their listing plans on hold. This decision is expected to provide the company with more time to assess market conditions and make informed decisions about its future fundraising activities.
Fabindia, an apparel retailer backed by Premji Invest, has decided to postpone its initial public offering (IPO) due to challenging macroeconomic conditions. The company had aimed to raise $482 million (~Rs 4,000 crore) by issuing new shares worth Rs 500 crore and offering up to 2.5 lakh shares of existing stockholders for sale. This decision is expected to provide the company with additional time to assess market conditions and determine the best course of action for future fundraising activities.
In a statement released on Monday, Fabindia cited unfavorable market conditions as the reason for its decision to withdraw its initial public offering (IPO). According to the company, the current market environment was not conducive to listing, and as a result, it has decided to explore other options for liquidity. However, the statement also indicated that Fabindia may revisit the possibility of filing for an IPO in the future, depending on its need for growth capital and the prevailing market conditions.
According to a spokesperson for Fabindia, the company is confident that the Indian consumer market will be a key driver of the global economy. Fabindia has reported record sales this year, with a year-on-year growth of 40% in its business. The spokesperson described this growth rate as the highest the company has ever achieved, indicating that it is well positioned to capitalize on the opportunities presented by India’s rapidly expanding consumer market.
Fabindia, a sustainable and traditional Indian wear retailer, has reportedly attracted interest from several leading global ESG-focused funds for investment in the company. However, the company did not provide any specific details on the potential investors.
Fabindia’s decision to withdraw its initial public offering (IPO) plans puts it in the company of other Indian firms such as boAt, Joyalukkas, and Snapdeal, which have all cancelled or postponed their IPOs due to market uncertainties. This news is likely to generate interest among investors, particularly those focused on ESG factors.
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