Fabindia Ltd IPO
FabIndia is a 6-decade old lifestyle platform focused on authentic, sustainable and Indian traditional lifestyle products. Its brands, ‘Fabindia’ and ...
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Last Updated: 10 October 2023 5:33 PM by 5Paisa
Azim Premji backed lifestyle retail brand, FabIndia, plans to raise up to ₹4,000 crore through an initial public offer. The offer comprises of a fresh issue of shares worth up to ₹500 crore and an Offer For Sale (OFS) of up to 2,50,50,543 shares.
The issue has a novel approach as the two promoters -- Bimla Nanda Bissell and Madhukar Khera -- intend to transfer 400,000 shares and 375,080 shares, respectively, to the artisans and farmers engaged with the company or its subsidiaries to reward express gratitude towards them
FabIndia is considering seeking a valuation of about $2 billion.
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 are the lead managers of the issue.
Objective of the Issue
The proceeds from the fresh issue of shares will be utilised for
1. voluntary redemption of the company's NCDs (Non-Convertible Debentures), pre-payment or scheduled re-payment of a portion of certain outstanding borrowings
2. general corporate purposes
FabIndia is a 6-decade old lifestyle platform focused on authentic, sustainable and Indian traditional lifestyle products. Its brands, ‘Fabindia’ and ‘Organic India’ are well recognized brands in India, with focus on the core principles of “Celebrating India” and “Healthy Conscious Living”, respectively. FabIndia offers a diverse portfolio of lifestyle products to across apparel and accessories, home and lifestyle, personal care and organic food categories.
Fabindia has an omnichannel experience with 311 stores across 118 cities in the country and 14 international stores and 74 Organic India stores and a network of retail touchpoints for Organic India (including general trade stores, modern trade stores and chemists). The company sources its products from villages of India and showcases handloom textiles and furniture to the world. The company relies on a purpose-driven approach, curated product portfolio and engagement with the supplier, contract manufacturer and customer communities. The company’s business model is framed after considering the interests of the artisans (that it engages with through the contract manufacturers) and farmers as integral part of it. It currently connects more than 55,000 rural producers to the urban markets. This acts as a differentiator factor for the brand and its products. The company also runs its own school with nearly 500 students.
It also offers healthy dining with regionally inspired foods and beverages through its subsidiary, FabCafe and holds a 68.46% stake in FabCafe.
| Particulars (in Rs. Crores) | FY21 | FY20 | FY19 |
|---|---|---|---|
| Revenue | 1059.64 | 1508.05 | 1474.31 |
| EBITDA | 69.62 | 257.45 | 316.31 |
| PAT | -117.14 | 30.69 | 84.36 |
| Particulars (in Rs. Crores) | FY21 | FY20 | FY19 |
|---|---|---|---|
| Total Assets | 2103.00 | 2466.04 | 2130.85 |
| Share Capital | 14.74 | 14.74 | 2.39 |
| Total Borrowings | 289.21 | 433.17 | 206.65 |
| Particulars (in Rs. Crores) | FY21 | FY20 | FY19 |
|---|---|---|---|
| Net cash generated from / (used in) operating activities | 125.15 | 230.17 | 195.31 |
| Net cash from / (used in) investing activities | -29.18 | -77.86 | -94.97 |
| Net cash flow from / (used in) financing activities | -217.80 | -217.80 | -132.90 |
| Net increase (decrease) in cash and cash equivalents | -121.83 | 162.22 | -32.56 |
Peer Comparison
| Name of the company | Total Revenue (in Rs. crores) | Basic EPS | NAV Rs. per share | PE | RoNW % |
|---|---|---|---|---|---|
| FABINDIA LIMITED | 1,087.41 | -7.45 | 43.99 | NA | -16.65% |
| Trent Limited | 2,794.56 | -4.11 | 65.07 | NA | -6.32% |
| Aditya Birla Fashion and Retail | 5,322.32 | -8.23 | 28.2 | NA | -25.44% |
| TCNS Clothing | 684.53 | -8.85 | 99.47 | NA | -9.21% |
| Tata Consumer | 11,723.41 | 9.3 | 157.72 | 78.7 | 5.89% |
| Dabur India | 9,886.94 | 9.58 | 43.36 | 59.04 | 22.10% |
Strengths:
- Leading consumer lifestyle platform focused on authentic craft-based and organic products
- Positioned to address growth in demand for high quality Indian lifestyle and organic products
- Sustainable-by-design’ business model which prioritizes the interests of its supplier community
- Established sourcing base and supply chain infrastructure
- Omni-Channel Presence
Risks:
- Unable to maintain and enhance the value and reputation of the brand and/or counter any negative publicity
- Inability to anticipate and respond to changes in the industry trends, particularly in fashion, and changing customer preferences in a timely and effective manner, the demand of the products may decline
- Unable to procure raw materials, finished products and packing material of the required quality and quantity, at competitive prices,
- The growth of online retailers may create pricing pressures, increase competition, and adversely affect the business
- Unable to grow and expand the business in domestic or international markets
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