FabIndia Limited , a lifestyle retail firm backed by Azim Premji, intends to raise up to Rs. 4,000 crore through an initial public offering. The offer consists of a new issue of up to 500 crore worth of shares and an Offer For Sale (OFS) of up to 2,50,50,543 shares.
The issue takes a unique approach in that the two promoters, Bimla Nanda Bissell and Madhukar Khera, intend to transfer 400,000 and 375,080 shares, respectively, to artisans and farmers involved with the company or its subsidiaries in order to express gratitude. FabIndia is considering a valuation of around $2 billion. The issuance is led 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.
Objective of the Issue
The proceeds from the fresh issue of shares will be utilised for :
- Voluntary redemption of the company’s NCDs (Non-Convertible Debentures), pre-payment or scheduled re-payment of a portion of certain outstanding borrowings
- General corporate purposes.
FabIndia is a lifestyle marketplace with a 6-decade history that focuses on authentic, sustainable, and Indian traditional lifestyle products. Its brands, Fabindia and Organic India are well-known in India, with a focus on the key values of “Celebrating India” and “Healthy Conscious Living,” respectively. FabIndia provides a comprehensive range of lifestyle products in the categories of fashion and accessories, home and lifestyle, personal care, and organic food.
Fabindia offers an omnichannel experience with 311 locations in 118 cities across the country, 14 overseas stores, 74 Organic India stores, and a network of Organic India retail touchpoints (including general trade stores, modern trade stores, and pharmacists). The company acquires its items from Indian villages and sells handloom textiles and furnishings around the world. A purpose-driven approach, curated product range, and involvement with supplier, contract manufacturer, and customer communities are all used by the organisation.
The business model of the company is designed with the interests of craftsmen (who it works with through contract manufacturers) and farmers in mind. It presently links over 55,000 rural farmers to urban markets. This serves as a distinguishing feature for the brand and its products. The corporation also has its own school, which serves around 500 kids. It also provides healthy eating with locally inspired dishes and beverages through its subsidiary, FabCafe, in which it has a 68.46% ownership.
Fabindia Limited IPO Financials
| Particulars | FY21 | FY20 | FY19 |
|---|---|---|---|
| Revenue From Operation | 10,596.43 | 15,080.47 | 14,743.07 |
| EBITDA | 1,006.47 | 2,723.83 | 3,504.20 |
| EBITDA Margin | 9.50% | 18.06% | 23.77% |
| Profit After Tax | -1,156.34 | 341.47 | 872.71 |
| EPS | -7.45 | 2.88 | 5.77 |
| ROE | -16.65% | 5.67% | 11.21% |
Fabindia Limited IPO Key Points
Strengths
- Consumers are increasingly becoming conscious towards products that drive sustainability and address environmental and social inclusiveness. This is where the company operates.
- The branded market is expected to grow further to Rs845 billion by Fiscal 2026 at a CAGR of 15.8% over Fiscal 2022- 2026, with the branded share increasing to 45% of the overall ethnic apparel market.
- The company is an omni-channel business combining digital with physical retail.
Risks
- The company has incurred losses in the past, which may adversely impact its business and the value of the Equity Shares.
- The growth of online retailers may create pricing pressures, increase competition, and adversely affect its business, results of operations and financial condition.
- The company relies on customers’ discretionary spending and has been and may continue to be adversely affected by the economic downturn.
Fabindia Limited Peer Comparison
| Competitor | Total Income (Cr) | Face Value per Equity Share | P/E | EPS (Basic) |
|---|---|---|---|---|
| FABINDIA LIMITED | 10,874.13 | 1 | – | 7.45 |
| Trent Limited | 27,945.64 | 1 | NA | 4.11 |
| ABFRL | 53,223.20 | 10 | NA | 8.23 |
| TCNS clothing | 6,845.25 | 2 | NA | 8.85 |
| Tata consumer | 117,234.10 | 1 | 78.70x | 9.30 |
| Dabur India | 98,869.40 | 1 | 59.04x | 9.58 |
Fabindia Limited IPO FAQs :
Q1. What is Fabindia IPO?
Ans. The Indian lifestyle brand Fabindia IPO comprises Rs 500 crore in fresh issues and 25,050,543 equity shares in OFS.
Q2. When will Fabindia IPO allotment be available?
Ans. There is no announcement regarding the date of allotment.
Q3. What will be Fabindia’s IPO lot size?
Ans. Details regarding the lot size of the IPO aren’t announced.
Q4. When will Fabindia IPO open for subscription?
Ans. There is no announcement regarding the date of the subscription.
Q5. What minimum lot size can retail investors subscribe to?
Ans. Retail investors need to apply for a minimum of one lot.
Q6. When is the Fabindia IPO listing date?
Ans. It takes around ten working days to complete the listing process after the last date of the subscription.
Q7. Which exchanges will Fabindia list on?
Ans. The IPO will list on BSE and NSE exchanges.
Q8. When will Fabindia list on exchanges?
Ans. Details are not available.
Q9. How will I receive shares?
Ans. Once allotted, the IPO shares will get credited to your Demat account.
Q10. Is it necessary to approve a UPI mandate request immediately?
Ans. To complete your bid, you must approve the UPI mandate within T+1 days.
Q11. Who is the owner of Fabindia?
Ans. The founder of Fabindia is John Bissell.
