03 May , 2022 By : monika singh
Ethnic wear brand Fabindia on Monday received the approval or observation letter of Sebi to go ahead with its proposed initial public offering (IPO) of Rs 4,000 crore. Sebi had approved the offer document on April 30, an update from the regulator showed on Monday.
FabIndia had filed its draft red herring prospectus (DRHP) with the regulator on January 24 this year. According to the DRHP, the company’s maiden public offering includes a fresh issue of shares worth up to Rs 500 crore, and an offer for sale (OFS) of up to 2,50,50,543 shares. In the OFS, apart from the Bissell family, other investors, including Premji Invest, Bajaj Holdings and Kotak India Advantage, are expected to offload their stake.
Further, promoters of the company intend to gift shares to artisans and farmers, according to the DRHP. “Our promoters, namely, Bimla Nanda Bissell and Madhukar Khera have opened their respective demat accounts and have transferred 400,000 equity shares and 375,080 equity shares, respectively, that are proposed to be transferred by way of gift to the artisans and farmers,” the company said.
As the public offer consists of a fresh share sale of Rs 500 crore, proceeds from the same will be utilised for voluntary redemption of the company’s NCDs (Rs 250 crore) and Rs 150 crore for pre-payment or scheduled re-payment of a portion of certain outstanding borrowings.
Incorporated in 1960, the lifestyle retail brand is primarily focused on authentic, sustainable and traditional products. The company’s brands – Fabindia and Organic India – are among the top recognized ones in India. As of FY21, the company posted revenue of Rs 1,059 crore, while the net loss during the period stood at Rs 116 crore.
Apart from Fabindia, the markets regulator has approved offer documents of eight other companies, including Aether Industries, Asianet Satellite Communications and Capillary Technologies India.
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