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Fabindia Limited IPO:Details, Price, Strength and Risks

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Fabindia Limited is a private lifestyle platform that focuses on manufacturing products using authentic techniques, skills and labour force. The brand aims to promote “Made in India” products by introducing authentic and Indian craftsmanship to the urban and global marketspace. 

Additional Read: Fabindia Limited IPO

This company submitted its Draft Red Herring Prospectus to SEBI to launch an IPO of fresh shares worth Rs. 5,000 million. However, the company has withdrawn its plan to issue the upcoming Fabindia Limited IPO owing to unfavourable market conditions. 

This blog will take you through a detailed overview of Fabindia Limited and its plan to go public. 

Additional Read: Upcoming IPOs in May 2024

About the Company

With a 62-year legacy, Fabindia is India’s first consumer lifestyle platform for products manufactured and designed using traditional techniques. As a private platform, this company connects approximately 55,000 rural artisans and local designers to modern markets. 

With this, thousands of rural artists and producers get the scope to present their talents in urban markets. This creates a strong base for their employment and a medium to preserve the “Indianness” in the fashion industry. 

Fabindia’s portfolio comprises a colourful platter of outfits, accessories, organic food, personal care and home and lifestyle products. The company maintains an omnichannel and pan-India presence with around 309 stores and experience centres across the nation. 

Under Fabindia Limited, there are around 74 Organic India stores and a strong network of touchpoints till September 2021. The company makes itself visible to its target audience through its online portal, third-party websites and its mobile app, Fabindia.

Fabindia’s business model lays a major focus on providing premium quality products to its customers while being a prominent platform for employment. The company hires contract manufacturers including experienced weavers and artisans. For Organic India products, the company engages farmers as an important part of its business model. 

Talking financially, Fabindia’s total income witnessed a slight drop from Rs. 14,814.94 in FY 2019 to Rs. 10,874.13 in FY 2021. The total expense of the company also declined from Rs. 13,289.73 in FY 2019 to Rs. 12,347.08 in FY 2021. 

Additional Read: How to Invest in an IPO Online

IPO Details and Objectives

Fabindia has submitted its DRHP to SEBI with the idea of going public with a fresh issue of equity shares worth Rs. 5,000 million. Despite receiving a positive nod from SEBI, the company withdrew its plans following the steps of BOAT and Snapdeal owing to unfavourable market conditions in February 2023.

The company plans to use its net proceeds to repay or prepay certain debts, voluntary redemption of NCDs issued by them and to fulfil general corporate necessities. 

You can explore our website to open a Demat and trading account with a few simple steps and invest in the upcoming Fabindia Limited IPO.  

Fabindia Limited IPO Details

According to its DRHP, Fabindia Limited will offer fresh equity shares worth Rs. 5,000 million in its upcoming public issue. The company is also launching 2,50,50,543 equity shares as an Offer for Sale. Fabindia has yet to declare the total worth of OFS shares that the company shall launch in its IPO.

The face value of each equity share set by Fabindia is Rs. 10. However, the company has yet to declare the minimum lot size, price band and opening and closing dates of the upcoming Fabindia Limited IPO. 

Strengths

Here are the strengths of Fabindia Limited that make this company suitable for long-term investments. 

  • Fabindia is India’s leading consumer lifestyle platform that focuses on authentic crafted and organic products. 

  • The company runs a "sustainable-by-design" business model that emphasises the interest and wellness of its supplier community.

  • Fabindia has an established sourcing base and a supply chain infrastructure that spans 109 districts in 21 states. 

  • This company also hosts an omnichannel presence on a pan-India basis with numerous brand outlets, retail stores, online platforms and business with third-party e-commerce sites. 

  • FabIndia holds a strong market position to address the growing demand for indigenous and organic products in India. 

  • The company also follows a capital-efficient business model and has a track record of excellent growth and return on capital employed. 

Additiona Read: Difference Between NFO and IPO

Risks Involved

Besides the above strengths, you must also know about the following risks that can hamper the business of Fabindia Limited. 

  • Health emergencies like the COVID-19 pandemic can disrupt the company's business adversely. Such scenarios can pose a hindrance to people's desire to visit physical stores. This can affect the company’s financials and operations. 

  • The inability to manage any negative publicity, or crisis or uphold the brand image and reputation can be harmful to its business. This can also hamper Fabindia’s operation and cash flow. 

  • The inability of company managers to track and anticipate the shifting fashion trends can be harmful to the brand positioning of Fabindia. If the company fails to stay on the same page with changing buying patterns, the company will lose its future customer prospects which can adversely affect its finances and operation. 

Conclusion

To conclude, these are the main points of the upcoming Fabindia Limited IPO that will help you make an informed decision while planning an investment strategy. Remember, the IPO full form is "Initial Public Offering," a process through which a private company becomes publicly traded by offering its shares to the public. If you are a novice investor, consider seeking assistance from financial experts to plan your investment strategy for the upcoming IPO

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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Frequently Asked Questions

Where will the Fabindia Limited IPO get listed?

Answer Field

Shares of Fabindia Limited IPO will be listed on BSE and NSE after its launch.

Who are the Book Running Lead Managers of the upcoming Fabindia Limited IPO?

Answer Field

ICICI Securities Limited, Nomura, JP Morgan, Credit Suisse, Equirus, and SBI Capital Markets are the Book Running Lead Managers (BLRM) of Fabindia Limited IPO.

What are the opening and closing dates for the upcoming Fabindia Limited IPO?

Answer Field

Fabindia is yet to announce the opening and closing dates for Fabindia Limited's IPO.

Who is the registrar of the upcoming Fabindia Limited IPO?

Answer Field

Link Intime Private Limited will be the registrar of the upcoming Fabindia IPO.

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