Fabindia Bit by IPO Fever: Details Here!

Indian ethnic wear and artisan product retailer, Fabindia is the next in line in the IPO bonanza currently buoying Indian investor sentiments. The company, established in 1960, is looking to raise around $1 billion from the markets this autumn. It is expected to file its prospectus in November.

To know more about the IPO and all its nitty-gritties, read on!

Key Features of the Fabindia IPO

FabIndia seeks to raise $1 billion from the markets in November.

They have proposed this move to raise capital. Before this news broke, the company was investigating various capital options, it said.

To manage its IPO, the company was on the lookout for various banks. Presently they have settled on 5 banks. These are:

1. ICICI Securities
2. SBI Capital Markets
3. JP Morgan
4. Credit Suisse
5. Nomura

Moreover, the company seeks a valuation of $2 billion and wishes to sell around 25-30% of its stake.

Fabindia IPO: Know More About the Company

1. Fabindia was established in 1960. It sells personal care products, apparel, home furnishings, organic food, gifts, jewellery, and furniture.
2. While the company has not yet declared its 2021 financial statements, experts insist that the financials for the COVID year may not be a good indicator of growth. This fact is obvious as there was a 79% dip in retail for the year 2021.
3. Competitors of Fabindia are Biba, W, Global Desi, Good Earth, Biotique, Forest Essentials.
4. So far, the company has gone by way of private equity. There have been investments from Wolfensohn Capital Partners, Capital Asia, and PremjiInvest. Since then, both Wolfensohn and PremjiInvest have made partial exits.
5. Infosys co-founder Nandan Nilekani and Rohini Nilekani are shareholders of the company.

Strengths of Fabindia

If you are wondering whether to invest in FabIndia or not, here are some of the company’s strengths.

1. Fabindia has a strong market position thanks to its ethnic and handicrafts section. Presently the group has 327 stores across India. The brand is very popular among the upper-middle class and middle-class Indians, where it finds a solid customer base.
2. Fabindia sources its products from rural India. Moreover, it has efficient supply chain management and good relationship with the suppliers.
3. Lastly, the company has an AA rating and has a strong financial risk profile.

Bottom Line

With investment sentiments mostly positive, it is expected that Fabindia’s IPO will have many takers. It looks to capitalise on the present investor mood. The company is seeking to sell shares in a mixture of primary and secondary share sales. Moreover, as the IPO valuation has not been decided as yet, the issue size could be about $500 million.

To know more about Fabindia, read up on it here.

Frequently Asked Questions

1. Who is selling stakes in Fabindia?

PremjiInvest is selling partial stakes in Fabindia.

2. Who are the other investors in Fabindia?

Investors in Fabindia are Lighthouse Funds, Axis Alternative Asset Management, Kotak Securities, PremjiInvest, Nandan Nilekani and his wife (co-founders of Infosys).

3. What will be Fabindia’s valuation post-IPO?

The IPO will put Fabindia’s valuation at $2 billion.