Mumbai: Anand Rathi Wealth Services Ltd, the wealth management arm of Mumbai-based financial services group Anand Rathi, said it has decided to withdraw its proposed initial public offering (IPO) and made an application in this regard to the Securities and Exchange Board of India (Sebi).
The company said it had filed its initial share sale documents in September when the markets were doing well, but with IPO markets entering a wait and watch mode, it has decided to explore an IPO at a later stage.
“The business is doing extremely well and the company is witnessing unprecedented traction in its target markets. However, a large part of the IPO proceeds were in nature of offer for sale by the holding company, and in light of the difficult market conditions, the group has decided to pursue other avenues to raise the requisite funds,” said Amit Rathi, managing director of Anand Rathi Wealth Services Ltd.
The wealth management business IPO aimed at raising a total of ₹425 crore through both primary and secondary issuance of shares.
Anand Rathi Wealth planned to raise ₹125 crore in fresh capital and an offer for sale of up to ₹300 crore by the promoter entity Anand Rathi Financial Services.
The company planned to use the IPO proceeds to purchase and furnish office premises in Mumbai.
The firm also planned to invest in its subsidiaries—ARWMPL and FIINFRA—for upgrade and enhancement of software and other technology-related expenses.
Investment banks Equirus Capital and Jefferies India were managing the company’s share sale process.
Stock market volatility because of macro headwinds such as rupee depreciation and crude prices, as well as the liquidity crisis that hit the financial sector after defaults by infrastructure financier Infrastructure Leasing & Financial Services, created hurdles for companies looking to go public as valuations corrected and investor interest turned lukewarm.
While 2017 was a record year for IPO issuance, with 36 companies raising ₹67,147 crore, in 2018 only 24 approached the IPO market to raise ₹30,959 crore, data from primary market tracker Prime Database shows.
The weak primary market has seen several companies struggle to go ahead with their listing plans.
In a recent industry conference held in Mumbai, Sebi chief Ajay Tyagi said that so far in this calendar year, the regulator has given its approval to about 70 companies to raise over ₹60,000 crore.
The list of companies that have received approval from the market regulator for IPOs but have not gone ahead with their plans include prominent names such as ReNew Power Ltd, which was planning to raise over ₹8,000 crore from its offering, and real estate developer Lodha Developers Ltd, which was aiming to raise more than ₹5,000 crore.