A jeweller, a lifestyle retailer, a marketplace and an online pharmacy…Here’s a list of companies from the retail ecosystem that shelved or deferred their plans to go public
As many as 191 companies have gone public between 2022 and 2023, as per Bombay Stock Exchange data. Businesses wanting to scale often take the route of listing getting listed on the stock markets for a variety of reasons including access to large-scale and cheaper funds, more liquidity and improved public image.
Going public also gives initial investors a chance to sell their stake through an Initial Public Offering (IPO)—the first time the securities are made available to retail investors in the form of shares.
IPOs are promoted to create curiosity much like Bollywood movies. However, not all IPOs that are announced or filed, see the light of day as expected. Many companies either withdraw their application or allow it to lapse. Between July 2022 and February 2023, as many as 33 companies that had planned IPOs (collectively worth Rs 49,300 crore) allowed their regulatory approvals to run out of validity. As per norms, companies are required to open their IPOs within a year of receiving Securities and Exchange Board of India (Sebi) approvals, failing which they must go through the approvals process again.
Here, we list companies from the retail ecosystem that either failed to launch their IPOs or decided not to in 2022 and 2023.
Mumbai-based smart wearables company Boat filed its Draft Red Herring Prospectus (DRHP) in January 2022 to raise Rs 2,000 crore through an IPO. However, parent company Imagine Marketing Ltd., announced freezing its plans in October 2022 owing to volatile market conditions.
Instead, the brand raised Rs 500 crore from existing backers Warburg Pincus and new investor Malabar Investments. The company planned on using the funds to gain leadership in the smartwatch category and scale its business across different channels and geographies.
In October, the company mentioned that it might consider an IPO again in 12 to 18 months in a statement.
Ethnic wear brand Fabindia filed the DRHP—a document that introduces the company to potential investors—in January 2022. Through the IPO, the billionaire Azim Premji’s Premji Invest-backed lifestyle retail company, intended to raise Rs 4000 crore by selling new shares worth Rs 500 crores and existing shareholders’ stock worth Rs 25.1 million.
Having earned a good reputation over 62 years, the company’s IPO was much awaited by retail investors. Also, through the IPO, Promoters Bimla Nanda Bissell and Madhukar Khera intended to transfer 400,000 shares and 375,080 shares, to the artisans and farmers working with the company as an expression of gratitude for their efforts and dedication, as per media reports.
The promoters intended to repay debts with the proceeds and also redeem non-convertible debentures the reports added.
The issue was managed by ICICI Securities Ltd, Credit Suisse Securities (India) Pvt Ltd, JP Morgan India Pvt Ltd, Nomura Financial Advisory and Securities (India) Pvt Ltd, SBI Capital Markets Ltd and Equirus Capital Pvt Ltd.
However, in February 2023, the company announced dropping its IPO plans.
Thrissur, Kerala-based jeweller Joyalukkas filed its DRHP for a public issue in March 2022. The intended size of the fresh issue was Rs2300 crore, funds from which would be used towards repaying some debts and store network expansion.
The book-running lead managers of the issue were Edelweiss Financial Services Ltd., Haitong Securities India Pvt. Ltd., Motilal Oswal Investment Advisors Ltd., and SBI Capital Markets Ltd.
However, in February 2023, the company withdrew its IPO citing “unfavourable market conditions” and substantial changes in its financials.
This is the second time that the leading retailer retracted its IPO plans. The first time was in 2011 when Joyalukkas filed its DRHP with the market regulator for a Rs 650-crore IPO.
Then too, it shelved the plan because of shaky market conditions, among other reasons.
MD Joy Alukkas told the media that the company hopes to tap the IPO market again in the financial year 2024-2025.
Online pharmacy Pharmeasy through its parent API Holdings had filed its DRHP in November 2021. It intended to raise Rs 6,250 crore through a fresh equity issue. The amount would have been used for clearing loans worth Rs 1,929 crore, as per media reports. Furthermore, the company had said it would use Rs 1,259 crore to fund organic growth initiatives and also use about Rs 1,500 crore towards inorganic growth through acquisitions and other strategic initiatives.
However, in August 2022, the company announced cancelling its plan to raise funds through a rights issue which meant raising capital from existing investors.
The reason the company cited for not going ahead with its IPO was “market conditions” and “strategic considerations”.
Softbank-backed online marketplace Snapdeal filed its DRHP with Sebi in December 2021 for an IPO intending to raise Rs1250 crore by issuing new shares. As per media reports, many of its investors including SoftBank, Sequoia Capital India and Foxconn planned to sell their shares (about 3,07,69,600 shares) during the issue.
Of the funds received from the IPO, Snapdeal had planned to earmark Rs 900 crore for initiatives related to organic growth and general corporate purposes.
However, in December 2022, the company announced indefinitely deferring its plans “considering prevailing market conditions”.
“We were going to the public market. However, at the point of time, we found that the market conditions turned out to be not good, so we shelved those plans and we withdrew the DRHP,” chief executive officer Himanshu Chakrawarti had told IndiaRetailing in an interview earlier this year.