Canbank Venture Capital-backed readymade fashion garments manufacturer Scotts Garments Ltd has withdrawn its initial public offering after it failed to enthuse investors despite extending the duration of the issue and snipping the price band at which shares were being offered.
The closing date of the issue was extended till May 3, as against the original deadline of April 29. The firm had also revised the IPO price band from Rs 130-132 per share to Rs 118-120.
Keynote Corporate Services was the book running lead manager (BRLM) and Canara Bank’s merchant banking unit was the co-BRLM to the issue.
The issue had seen poor response with applications for just around 25 per cent of the issue size, as of April 29. After an extension of the issue duration, it managed to see only 27 per cent subscription. The firm had an average IPO investment grade.
It is the second casualty this year after Sai Silks (Kalamandir) Ltd withdrew its IPO in February.
The Bangalore-based company had proposed to raise Rs 137-139 crore by offering 1.05 crore equity shares of Rs 10 each, at a price band of Rs 130-Rs 132. With a revised price band, it was seeking to raise around Rs 124-126 crore.
The company planned to use the money raised via IPO for setting up a trouser manufacturing unit at Doddaballapur (Karnataka) and a knitting & fabric processing unit at Kagal (Maharashtra) besides using some of it as working capital for new units and other purposes.
Scotts Garments was founded in 1994 and produces woven, knitted and denim garments. The firm had revenues of Rs 500 crore (bulk of it from exports) with net profit of Rs 84 crore for the year ended March 31, 2012.
Last December, Emerging India Growth Fund, managed by Canbank Venture Capital Fund Ltd, acquired 6.11 per cent stake in Scotts Garments for Rs 20 crore in a pre-IPO placement. The firm also counts Bombay Rayon Fashions as a shareholder.