Ethnic wear retailer Fabindia will file draft documents for its initial public offering before the end of December to raise funds up to 4,000 crore, said two people aware of the development. The company’s shareholders approved the IPO proposal in an extraordinary general meeting on Saturday.
Fabindia plans to increase 250 crore in new capital to expand its store network and grow its e-commerce platform. Many investors in the 60-year-old company will also sell a part of their stake taking into account the total size of the public offering. 3,800-4,000 crore, the people cited above said on condition of anonymity.
A Fabindia spokesperson declined to comment.
“People 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,” said either of the two people above. One said. “Currently, e-commerce business contributes to 10-15% of sales, and FabIndia is planning to increase this,” he said.
Apart from farmers and artisan shareholders, Fabindia’s existing investors include PI Opportunities Fund, Bajaj Holdings & Investments Ltd., Axis New Opportunities, India 2020 Fund II Ltd., Kotak India Advantage Fund, Azim Premji’s private equity fund PremjiInvest, co-founder of Infosys Nandan Nilekani and his wife Rohini Nilekani, Rekha Menon, chairperson, Accenture, and Sanjeev Bikhchandani, founder of Info Edge, show filings with the Registrar of Companies. Promoters hold 49% stake in the company.
Primarily known for ethnic wear, Fabindia has forayed into new product categories such as home & lifestyle, personal care and organic food over the years. It runs another subsidiary, Fabcafe, for urban consumers serving healthy food using locally sourced organic ingredients. Recently, it launched its personal care range FabEssentials.
Apart from being the largest apparel retail IPO in the country, Fabindia will be one of the few companies to go public, which has a strong track record on ESG (environmental, social and governance), said the second person cited above.
“The company does not operate any factories of its own. Its business model focuses on sustainability by design, and it claims to create a unique supply-side community with its model of partnership with over 50,000 artisans, weavers and craftsmen and approximately 10,400 through more than 2,200 farmers and associates. Is. Many artisan and farmer families have been working with Fabindia for generations.”
In FY19, Fabindia recorded a revenue of 1,457 crore, up from 1,336 crore in the previous year and profit of 101 crores, increasing from 83 crores as per the credit rating report of September 2020 by CRISIL.
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