Fabindia Shelves $482 Million IPO Due To Volatile Market Conditions

Fabindia, popular for its sustainable and traditional Indian wear, said it may consider going public in the future and that several global ESG-focused funds had expressed an interest to invest

Fabindia becomes the latest firm to scrap listing plans as interest rate worries pressure stock markets.

Fabindia, an Indian apparel retailer, on Monday said it has withdrawn its initial public offering (IPO) plan for a $482 million because of volatile market conditions, as reported by news agency Reuters. According to the report, Fabindia becomes the latest firm to scrap listing plans as interest rate worries pressure stock markets.

Fabindia, the 62-year-old firm, popular for its sustainable and traditional Indian wear, said it may consider going public in the future and that several global ESG-focused funds had expressed an interest to invest. However, the company did not divulge more details.

The move to pull IPO plans by Fabindia comes after e-commerce firm Snapdeal and wearable electronics company boAt pulled their IPOs due to uncertain market conditions in the past few months. Jewellery retailer Joyalukkas also scrapped its plan to go public.

Hemang Jani, equity strategist at Motilal Oswal Financial Services, "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 over 4 per cent so far this year on worries that major central banks will raise rates for longer to fight persistently high inflation.

Shares of Fabindia's listed rivals Vedant Fashions, Aditya Birla Fashion and Retail and Arvind Fashions are down 14 per cent-21 per cent this year.

Fabindia in January last year said it would raise 40 billion rupees by selling new shares worth 5 billion rupees and up to 25.1 million in existing shareholders' stock in the IPO, intending to use proceeds to repay debt and redeem non-convertible debentures.

Meanwhile, Oravel Stays Ltd, which operates travel tech firm and brand OYO, in January said it would refile its draft initial public offering (IPO) papers by the middle of February.

The Securities and Exchange Board of India (Sebi), had asked the company to refile the draft IPO application with certain updates earlier this month. The regulator had asked the firm to refile it with applicable updates/ revisions. Although, the Sebi did not elaborate on the updates or revisions required in the draft documents.