FabIndia, a lifestyle retail brand, intends to generate up to 4,000 crore through an initial public offering, and the company’s promoters plan to distribute more than 7 lakh shares to craftsmen and farmers in a novel process.
The company submitted the Draft Red Herring Prospectus (DRHP) with market regulator Sebi on Saturday for the offer, which will involve a fresh issue of up to 500 crore shares.
In addition, an Offer For Sale (OFS) of up to 2,50,50,543 shares will be made. The Initial Public Offering (IPO) is likely to be worth approximately 4,000 crore, according to market sources.
Following the filing of the DRHP, FabIndia’s two promoters, Bimla Nanda Bissell and Madhukar Khera, intend to transfer 4,00,000 and 3,75,080 shares, respectively, to them in order to “thank and express gratitude to specific artisans and farmers working with the company or its subsidiaries.”
Our promoters, namely, Bimla Nanda Bissell and Madhukar Khera have opened their respective demat accounts and have transferred 4,00,000 equity shares and 3,75,080 equity shares, respectively, that are proposed to be transferred by way of gift to the artisans and farmers,” the DRHP stated.
The proceeds from the new share offering will be used for the voluntary redemption of the company’s NCDs (Non Convertible Debentures), the pre-payment or scheduled re-payment of a part of certain outstanding borrowings, and other general corporate objectives.
In the DRHP, the firm has mentioned about its ESG (Environmental, Social and Governance) initiatives, telling it believes that “enabling and uplifting the people we work with, taking care of the environment, and being ethical in our conduct with have a long and lasting positive impact”.
“We have aimed to create social impact and foster economic well being for our artisans, communities, employees and investors, using environmentally responsible and ethical means,” it added.
The lead managers of the issue are 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.