Fabindia’s shareholders gave a nod to the IPO proposal on Saturday. The company is planning to raise Rs 250 crore in fresh funding in order to expand its footprints.
FabIndia, a retailer of clothing and furniture inspired by traditional Indian crafts, plans to file draft documents for its initial public offering (IPO) before the end of December for raising up to Rs 4,000 crore, reported Mint, citing people privy to the development.
On Saturday, the company’s shareholders gave a nod to the IPO proposal.
The ethnic wear retailer is planning to raise Rs 250 crore in fresh funding in order to expand its footprint and enhance its e-commerce platforms. Interestingly, many investors of Fabindia will sell their stakes in the company, taking the total size of the public offering to Rs 3,800-4,000 crore, the people cited above said on condition of anonymity, a report in a Mint said.
However, Fabindia spokesperson refused to comment on the development.
“Footfalls have increased, the mood is optimistic, and the company is poised for steady growth. Right now, the priority is to stabilize and review the performance of existing stores, but the company will also add stores," one of the persons cited above said.
“Currently, the e-commerce business contributes to 10-15 per cent of sales, and Fabindia is planning to enhance this,” he added.
Founded in 1960 by John Bissell to showcase Indian handloom textiles to the world, Fabindia sources a large share of its products from villages across India, according to its website. The company connects more than 55,000 rural producers to urban markets, and runs its own school with nearly 500 students, the website shows.
In FY19, Fabindia recorded revenue of Rs 1,457 crore, up from Rs 1,336 crore in the previous year and a profit of Rs 101 crore, growing from Rs 83 crore, according to a September 2020 credit rating report by Crisil.
Apart from farmers and artisan shareholders, Fabindia’s existing investors include PI Opportunities Fund, Bajaj Holdings and Investment Ltd, Axis New Opportunities, India 2020 Fund II Ltd, Kotak India Advantage Fund, Azim Premji’s private equity fund PremjiInvest, Infosys co-founder Nandan Nilekani and his wife Rohini Nilekani, Rekha Menon, chairperson, Accenture, and Sanjeev Bikhchandani, founder of Info Edge, filings with the registrar of companies show.
In October, FabIndia pulled down its collection titled ‘Jashn-e-Riwaaz’ on Monday after #boycottFabIndia started to trend on Twitter. FabIndia had tweeted about their collection collection ‘Jashn-e-Riwaaz’ on October 9, with the post, “As we welcome the festival of love and light, Jashn-e-Riwaaz, by FabIndia is a collection that beautifully pays homage to Indian culture…”. The post had the image of men and women all wearing ethnic clothes in the colour red.
FabIndia removed the tweet and pulled down the advertisement, following an uproar by Twitter users accusing FabIndia of dampening the Hindu festival of Diwali.