FabIndia, a leading Indian retailer and lifestyle brand, has cancelled its planned INR 4000 crore ($536 million) initial public offering (IPO) due to ongoing market volatility. The company stated that the decision to withdraw was due to “current market conditions [that] were not seen to be conducive for listing a company of our size.” The Indian benchmark NSE Nifty 50 stock index has fallen over 4.32% so far this year, contributing to the decision to cancel the IPO. The stock markets are facing uncertainty due to fears that major central banks, including the U.S. Federal Reserve, will continue a high interest rate regime as inflation remains high. FabIndia has stated that it will now explore other options for liquidity and may consider filing for an IPO in the future, depending on its need for growth capital and prevailing market conditions.
FabIndia’s business is focused on working with local artisans and farmers to derive inspiration from traditional Indian products, which makes the company ESG (Environmental, Social, and Governance) friendly. The company has received a very positive response from global institutional investors, especially those focused on sustainability. FabIndia stated that several leading global ESG-focused funds have expressed interest in investing in the company, appreciating its strong ESG track record of more than six decades and belief in its business model, which is based on ESG values.
The cancellation of FabIndia’s IPO comes as a blow to the Indian market, as several companies have recently raised capital through IPOs. Despite this setback, the Indian government has been encouraging more companies to go public in a bid to increase liquidity in the market. The Securities and Exchange Board of India (SEBI) has eased listing norms for startups and provided a more relaxed regulatory framework for special purpose acquisition companies (SPACs), indicating the government’s efforts to boost public offerings.
The cancellation of FabIndia’s IPO can also be attributed to the increasing scrutiny of ESG factors in investment decisions. Many investors have been focusing on investing in companies that align with their ESG values, and FabIndia’s strong ESG track record has helped the company attract interest from global investors. The focus on ESG factors is expected to continue, and companies that have a strong ESG track record are likely to benefit from this trend.
FabIndia has stated that it will continue to explore growth opportunities and remain focused on its core business. The company is known for its ethical business practices and sustainable production methods, which have helped it gain a loyal customer base. Despite the cancellation of the IPO, FabIndia remains a strong and profitable business with a promising future. The company has a strong brand value and is well-positioned to continue its growth trajectory in the years to come.
The cancellation of FabIndia’s IPO is a reflection of the current market conditions and the increasing focus on ESG factors in investment decisions. The company’s strong ESG track record has helped it attract interest from global investors, and it remains a strong and profitable business with a promising future. While the cancellation is a setback, the company will continue to explore growth opportunities and remain focused on its core business. The Indian market is expected to continue to encourage more companies to go public, and FabIndia may reconsider filing for an IPO in the future, depending on prevailing market conditions.
