Kalpataru Power’s logistics unit withdraws IPO plan

Shree Shubham Logistics Ltd has withdrawn its initial public offering (IPO) proposal that involved selling fresh shares and a stake sale by private equity investor Tano Capital, the company’s parent said.

In a stock exchange filing, Kalpataru Power Transmission Ltd didn’t provide any reason for the unit withdrawing its IPO plan.

Shree Shubham, a farm commodities-focused supply chain firm, had filed its draft red herring prospectus with the Securities and Exchange Board of India in February this year to float its IPO. It received the market regulator’s nod in June.

Indian stock markets have fallen this year. The Bombay Stock Exchange’s benchmark Sensex has so far slid about 12 per cent from its 2015 high, touched in February.

The public float was to comprise a fresh issue of shares to raise up to Rs 210 crore ($31.5 million) in addition to an offer for sale of 7 million shares by Tano Capital. The offer included 100,000 shares reserved for employees.

Tano Capital had invested Rs 80 crore in the company through a mix of shares (Rs 35.1 crore) and compulsorily convertible debentures (Rs 44.9 crore) in May 2013. It owns 14.27 per cent of the firm, having converted just under a third of the debentures. Its remaining debentures can give it as much as 6.5 million shares, which it would have held after the IPO.

Shubham Logistics started operations in January 2007. It provides a post-harvest value chain for farm commodities. Its services include warehousing, procurement, primary processing, trading, collateral management, funding facilitation, testing and certification, and pest management.

A number of companies, including the parents of budget airline IndiGo and coffee café chain Coffee Café Day, have launched IPOs over the past couple of months. And many more are in the pipeline, including that of diagnostics chain Dr Lal PathLabs Ltd and drug maker Alkem Laboratories Ltd which are hitting the market next week.

Only a few companies have scrapped or deferred their IPO plans this year. In April, education services company CL Educate Ltd, best known for its erstwhile test prep brand Career Launcher, withdrew its IPO application.

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