Indian auto parts maker Tata AutoComp Systems has withdrawn its sale document to raise at least $245 million through an initial public offering of shares due to poor market conditions, said a person familiar with the matter.

The person, who didn't wish to be identified, did not elaborate further.

Tata AutoComp Systems, part of the $68 billion diversified Tata group, had filed papers with the Indian market regulator last year.

This would have been the first share sale from the Indian salt to software conglomerate after it listed Tata Consultancy Services in 2004.

The firm had appointed JM Financial Consultants Pvt Ltd, Tata Capital Markets Ltd and JP Morgan India Pvt Ltd as managers to the sale, which had included a fresh issue of shares as well as existing shareholders including Tata Motors selling some stake.

Tata Motors, owners of Jaguar and Land Rover, holds a 26 per cent in the auto parts maker and is also its largest customer.

Tata AutoComp which also counts Fiat, Ford Motor, General Motors, Volkswagen, Ashok Leyland and Eicher as clients makes a range of auto components --including vehicle interiors, exteriors, engine cooling systems, seating systems, wiring harnesses, batteries, sheet metal parts, mirrors and control cables.

A host of Indian companies have postponed or scrapped their share sales as renewed fears of global recession has led to foreign investors moving their capital out to safer-haven assets.

Last week, India's education services provider Educomp Solutions said it has deferred a proposal to raise up to $250 million through a share sale due to poor market conditions.

The Indian government's plan to raise about $9 billion in the current fiscal year, to bridge its fiscal gap, has also been hit as a large number of big ticket issues from state-run firms like Oil & Natural Gas Corp. and Steel Authority of India have got delayed.

ONGC's follow-on share sale, valued at around $2.5 billion and delayed by more than six months, is likely to launch on Sept 20 and will close on Sept 23.

Indian markets have been amongst the worst performing in the world this year with the main 30-share BSE index .BSESN down about 18.5 percent since the start of January.

Indian companies raised $7.1 billion in equity in the first half of 2011, down 42 per cent from the year-ago period, Thomson Reuters data showed.

Foreign institutional investors have sold more than $2 billion in Indian stocks in August alone.

"The market conditions are very bad at the moment. Private companies are a worried lot and genuine public issues are difficult to sail through," said Kishor Ostwal, Chairman at CNI Research.

"Though there is not much downside left in the market, it will still take a couple of months for the market to stabilize. During such a period, I don't think any promoter would try and launch a share issue," he said.

The fast growing automotive sector has also hit a speed bump in recent months with car sales falling 16 per cent in July, their first drop in two-and-half years, after rising a breakneck 30 per cent in 2010.

Revenue growth of the Indian auto ancillary industry is likely to halve this financial year due to slowing domestic vehicle sales and a higher base year ago, according to the apex industry body.

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