By Aleef Jahan C S
BENGALURU (Reuters) -Indian apparel retailer Fabindia said on Monday it has withdrawn its plan for a $482 million initial public offering amid rough market conditions, becoming the latest company to scrap listing plans as interest rate worries pressure stock markets.
The 62-year-old company, 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. It did not give details.
Fabindia’s move to pull its IPO plans comes after e-commerce firm Snapdeal and wearable electronics company boAt pulled their IPOs due to uncertain market conditions in the past few months, while jewellery retailer Joyalukkas also scrapped such plans.
“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,” said Hemang Jani, equity strategist at Motilal Oswal Financial Services.
India’s benchmark Nifty 50 stock index is down over 4% 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%-21% 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. ($1 = 82.9130 Indian rupees)
(Reporting by Aleef Jahan and Chris Thomas in Bengaluru; Editing by Janane Venkatraman and Sonia Cheema)
