New Delhi : Fabindia Overseas Pvt. Ltd. has hired five investment banks to help the ethnic wear retailer raise between $750 million and $1 billion, said two people familiar with the development.
The company has hired investment banks ICICI Securities, SBI Capital Markets, JP Morgan, Credit Suisse and Nomura, people said on condition of anonymity.
Fabindia is the latest to capitalize on the buoyant sentiment from investors that has driven shares to record highs.
38 companies entered the primary markets this year, the most in a decade, which is more than ₹60,000 crores, according to stock exchanges data. Many more are preparing or ready to go public.
Fabindia is expected to submit the draft initial public offering (IPO) documents to the market regulator by November, one of the two people said. Mint first reported in June that the company was looking for an IPO at a valuation of $2 billion.
Fabindia may sell around 25-30% stake to the public in a mix of primary and secondary share sales, the first person said. The issue size could be as small as $500 million, depending on the shareholders’ decision to exit during the IPO, the second person said, adding that the valuation of the IPO has not been fixed.
PremjiInvest, one of the company’s investors, will sell a part of its stake in the company during the IPO. Other investors in the company include Lighthouse Fund, Axis Alternative Asset Management and funds managed by Kotak Securities. Infosys co-founder Nandan Nilekani and his wife Rohini Nilekani are also shareholders.
A Fabindia spokesperson said that the company has “considered various capital-related options from time to time. We also consult our bankers. At the right level, we will discuss any plans with the board of directors and their will be guided by the decision. We have nothing further to comment on at this stage,” the spokesperson said.
Fabindia Overseas sales up 2.3% ₹1,508 crore in FY20 from ₹1,474 crore in the previous year. However, net profit decreased ₹from 30 crore ₹101 crores during the period under review, according to VCCEdge, VCCircle’s data intelligence platform.
Fabindia is yet to report its FY21 financials, but the second person cited above said the COVID-year fiscal “may not be a meaningful metric for future growth”.
SBI Capital Markets spokesperson JP Morgan and Credit Suisse declined to comment on the development. Other banks and PremjiInvest did not respond to queries till the time of going to press.
Fabindia sells apparel, home goods, furniture, gifts, jewellery, organic food and personal care products through its 311 stores across 118 cities and 14 international stores in the country, according to its website.
Fabindia competes in the ethnic wear segment with brands such as Biba, Good Earth, W and Global Desi. In the personal care segment, its competitors include Biotique and Forest Essentials. Among the fashion labels, players like Manyavar and GoColors are also gearing up to make their debut on the exchanges.
Fabindia first attracted the attention of private equity in 2007. That year, New York-based Wolfensohn Capital Partners invested $11.2 million for a 6.45% stake, valued at $180.6 million according to VCCEdge. Four years later, Wolfensohn increased his stake to 8.96% for an undisclosed amount. In 2012, L Capital Asia and PremjiInvest invested $60.6 million in a transaction that included a primary infusion as well as a secondary purchase. Wolfensohn was eliminated from Fabindia in this round.
PremjiInvest actually had a partial exit from the company in 2019 when it sold a part of its stake to PIPE funds of Kotak Mahindra Bank and Axis Bank as well as Kotak Securities and non-bank lender Bajaj Holdings & Investments Ltd. Was.
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