Indian apparel retailer Fabindia, which is backed by Premji Invest, has decided to shelve its initial public offering (IPO) due to challenging macroeconomic conditions. The company had initially planned to raise $482m (INR 4,000 crore) through a fresh issue of shares worth INR 500 crore and an offer for sale of up to 2.5 lakh shares by existing stockholders. However, Fabindia announced on Monday that it has decided to withdraw its IPO plans as current market conditions were not deemed conducive for a successful listing. The company stated that the withdrawal would enable it to explore other options for liquidity and that it may reconsider filing for an IPO in the future if there is a need for growth capital in more favourable market conditions.
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Fabindia, which was founded in 1960, sells clothing, accessories, and home furnishings made from traditional Indian textiles and handicrafts. The company has grown to operate more than 300 stores in India and overseas and has been expanding its footprint in the online marketplace. The decision to shelve the IPO comes as a surprise to some as the company had reportedly received regulatory approval for its public offering and had been conducting investor roadshows.
The Indian IPO market has experienced significant volatility in recent months due to a range of factors, including the ongoing Covid-19 pandemic, concerns over inflation and rising interest rates, and the impact of geopolitical tensions on investor sentiment. Several companies have delayed or cancelled their IPO plans in light of the uncertain market conditions. Despite the challenges, some experts remain optimistic about the potential for Indian companies to attract investment in the long term, citing the country’s large and growing consumer market and favourable demographic trends.