Fri. Mar 29th, 2024
FabIndia Appoints Investment Banker: Likely To Raise Up To $1 billion

Fabindia Overseas Pvt. Ltd has hired five investment banks, namely  ICICI Securities, SBI Capital Markets, JP Morgan, Credit Suisse and Nomura to float an IPO worth between $750 million and $1 billion, two people familiar with the development told the daily publication, The Mint. 

The clothing and home products retailer is likely to file its draft initial public offering (IPO) documents with the markets regulator by November, one of the two people said, reports Mint. In June, many reports were circulating expecting the company to explore an IPO at a $2 billion valuation

A 25-30% stake of the company is estimated to go public in a combination of primary and secondary share sales, a  source told the publication. It depends on the decisions of the shareholder whether to make an exit during IPO or not, the issue size could suffice in as small as $500 million, the other source added, telling IPO valuation is yet to be decided. 

Lighthouse Funds and PremjiInvest are the investors in the company, out of them, PremjiInvest is likely to share a part of its own during the IPO. Infosys co-founder Nandan Nilekani and his spouse Rohini Nilekani also own some shares.

In 2013 Fabindia entered into a partnership agreement with Organic India. With 327 stores across 118 cities in India and 14 international stores, Fabindia Overseas Private Limited is the country’s largest retail platform. 

A Fabindia spokesperson said the firm has “considered various capital-related options from time to time”.  Further said, “We also take advice from our bankers. At the right stage, we will discuss any plans with the board of directors and be guided by their decision. We have nothing further to comment on this subject at this stage.”

Fabindia Overseas’ sales were posted to be ₹1,508 crore in FY20, a 2.3% growth from ₹1,474 crore the previous year. However, net profit came down to ₹30 crore from ₹101 crore during the period under review, as per VCCEdge.

Fabindia FY21 financials are yet to be disclosed, but the sources told the publication that they “may not be a meaningful metric for future growth”.

In the Ethnic wear segment brands like  Biba, Good Earth, W and Global Desi are tough competition to the company, While in the personal care segment, Biotique and Forest Essentials pose a tough fight. 

In 2007 New York-based Wolfensohn Capital Partners invested $11.2 million for a 6.45% stake, estimating the valuation at $180.6 million, according to VCCEdge. In 2012, L Capital Asia and PremjiInvest poured in $60.6 million against primary infusion as well as a secondary purchase. Wolfensohn exited Fabindia in this round.

In 2021, As many as 38 companies have made a public debut by raising as much as ₹60,000 crore, according to data from stock exchanges. Many are lined up for later in this year. 

 

By Harshita Sharma

I bring to you updates from business, policy and economy spectrum.

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