Fabindia withdraws its ₹40 billion ($482.4 million) initial public offering amid tough market conditions. , Photo credit: The Hindu
Apparel retailer Fabindia on Monday said it has withdrawn its ₹40 billion ($482.4 million) initial public offer amid tough market conditions, becoming the latest company to scrap listing plans as interest rate pressure weighed on shares. Worries about the markets.
India’s benchmark Nifty 50 stock index is down more than 4% so far this year on concerns that major central banks including the US Federal Reserve will prolong the high interest rate regime due to a persistent rise in inflation.
Fabindia’s listed rivals Vedanta Fashion, Aditya Birla Fashion & Retail and Arvind Fashion are down 14%-21% this year.
In a statement, a Fabindia spokesperson said, “The decision to withdraw was taken as the current market conditions did not appear conducive for the listing.”
Fabindia had planned a fresh issue of shares worth ₹5 billion and sale of up to 25.1 million of existing shareholders’ stock. It was intended to use the proceeds to repay debt and redeem non-convertible debentures.
“The withdrawal will allow Fabindia to explore other options for liquidity. The company may reconsider filing an IPO in future depending on the need for growth capital and market conditions,” the company said.
Jewelery Retailer JoalukkasE-commerce firm Snapdeal and wearable electronics company boAt have called off their IPOs due to uncertain market conditions.
Sixty-two-year-old Fabindia, known for its sustainable and traditional Indian apparel, also said that several global ESG-focused funds had expressed interest to invest in the company. It did not provide additional details.