Fabindia drops Rs 4,000-cr IPO plans amid rough market conditions

Indian ethnic brand Fabindia said it has withdrawn its Rs 4,000 crore initial public offering (IPO) due to volatile market conditions. In a regulatory statement on Monday, the 62-year-old company said that the current market conditions were not seen to be conducive for listing at the bourses.

“The decision to withdraw was taken as the current market conditions were not seen to be conducive for listing,” Fabindia said in a statement on Monday.

The company, which is known for its Indian ethnic sustainable wear, said it may go ahead with its IPO in the future and that several global ESG-focused funds had expressed an interest to invest. The company hasn’t shared the details of the investments.

Last year in January, Fabindia said it would raise Rs 40 billion by selling new shares worth Rs 5 billion 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.

Fabindia’s decision to call off its IPO comes days after Snapdeal and boAt shelved their IPO plans due to uncertain market conditions. Last week, leading jeweller Joyalukkas India went on to withdraw its Rs 2,300 crore IPO citing weak sentiments.

Analysts requesting anonymity said that the market sentiments are weak now, and investors are extra cautious about choosing the right set of companies to get sustainable return.

After Monday's trading session, BSE companies' total market capitalisation touched Rs 258 lakh crore which is the lowest level seen since July of 2022. Investors have lost a total market value of Rs 2 lakh with a major contribution in massive slump in Adani Group stocks, which saw the group value slipping below Rs 7 lakh crore.

The market capitalisation (m-cap) of 10 Adani group companies has fallen below Rs 7 lakh crore mark in Monday's trade, thanks to persistent selling pressure in key names including Adani Total Gas Limited, Adani Enterprises Limited, Adani Green Energy and Adani Transmission Limited.

Also read: Sensex tanks nearly 2,000 points in 2023; these 3 factors can give stock market a reason to cheer

Also read: Warren Buffett annual letter has 3 lessons for stock investors

Also read: Mphasis shares slip over 8% as Citi sees 22% downside

Also read: LIC shares extend fall, slip 3% today to hit 52-week low; here's what analysts say