Fabindia Overseas Pvt. Ltd plans to go public as early as the end of this year, with the retailer of ethnic wear to furniture targeting to raise about ₹3,000 crore, said two people familiar with the matter.
Fabindia is in the process of hiring bankers for the initial public offering (IPO) that is expected to value the company at around $1.5-2 billion, the people said on condition of anonymity.
The share sale is aimed more at giving exits to investors, including private equity firm PremjiInvest, than raising funds for the company, the people said.
The IPO will likely see the full exit of PremjiInvest, which owns nearly 25% of the company, said one of the two people cited above.
“The company doesn’t need immediate cash, so the IPO is intended to facilitate exits for early backers,” this person said.
PE firm Lighthouse Funds is the other significant investor in the company.
Fabindia and PremjiInvest did not respond to queries emailed on Tuesday.
Fabindia is the latest company to try to tap public markets amid a record stocks rally in India and booming demand for most IPOs.
{{/usCountry}}Fabindia is the latest company to try to tap public markets amid a record stocks rally in India and booming demand for most IPOs.
{{/usCountry}}Several companies have lined up to launch public offerings by December end or next year, seeking to exploit this demand momentum.
Fabindia has 311 stores across 118 cities in India and 14 stores overseas. It sells apparel, home furnishings, furniture, gifts, jewellery, organic food and personal care products, among other items.
Fabindia competes with brands such as Biba, Good Earth, W and Global Desi in the ethnic wear segment. In the personal care segment, its competitors include Biotique and Forest Essentials.
Fabindia first grabbed the attention of private equity investors in 2007. That year, New York-based Wolfensohn Capital Partners invested $11.2 million for a 6.45% stake, valuing the company at $180.6 million, according to VCCEdge.
Four years later, Wolfensohn raised its stake to 8.96% for an undisclosed amount.
In 2012, L Capital Asia and PremjiInvest pumped $60.6 million in a deal that comprised a primary infusion as well as a secondary purchase. Wolfensohn exited Fabindia in this round.
PremjiInvest made a partial exit from the company in 2019 when it sold a portion of its stake to PIPE funds of Kotak Mahindra Bank and Axis Bank as well as Kotak Securities and non-bank lender Bajaj Holdings and Investments Ltd.
Fabindia’s posted consolidated net sales of ₹1,508 crore in fiscal 2020, up from ₹1,474 crore a year earlier. Net profit, however, declined to ₹30 crore from ₹101 crore during the period under review, according to VCCEdge.
Several large companies, including fintech giant Paytm and e-commerce firm Flipkart, owned by Walmart Inc., are preparing for an IPO in India or overseas. E-pharmacy unicorn PharmEasy is likely to go for an IPO locally.
Earlier this month, three companies backed by PE firms comprising auto parts maker Sona BLW Precision Forgings, hospital chain Krishna Institute of Medical Sciences Ltd and dairy company Dodla Dairy launched their IPOs.