Indian retailer Fabindia scraps US$482 million IPO amid uncertain market conditions
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INDIAN apparel retailer Fabindia said on Monday (Feb 27) that it has withdrawn its plan for a US$482 million initial public offering (IPO) amid rough market conditions, making it the latest company to scrap listing plans as interest-rate worries pressure stock markets.
The 62-year-old company, known for its sustainable and traditional Indian wear, said it might consider going public in the future, and that several global funds with a focus on environmental, social and governance criteria had expressed interest in investing in it. The retailer did not give details.
Fabindia’s move comes after e-commerce company Snapdeal and wearable electronics business boAt withdrew their IPOs due to uncertain market conditions in recent months. Jewellery retailer Joyalukkas also scrapped such plans.
Hemang Jani, equity strategist at Motilal Oswal Financial Services, said: “Sentiment is weak now. Most of these companies are looking to raise money at higher valuations than is possible in the market right now, and there is no proper appetite.”
India’s benchmark Nifty 50 stock index is down more than 4 per cent this year so far on worries that major central banks will continue raising rates to fight persistently high inflation.
Shares of Fabindia’s listed rivals Vedant Fashions, Aditya Birla Fashion and Retail, and Arvind Fashions are down between 14 per cent and 21 per cent this year.
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In January last year, Fabindia said it would raise 40 billion rupees (S$651.7 million) by selling new shares worth five billion rupees, and up to 25.1 million of existing shareholders’ stock in the IPO. It had intended to use the proceeds to repay debt and redeem non-convertible debentures. REUTERS
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