Stitched Textiles scraps IPO plan; withdraws draft papers Stitched Textiles, which owns leading men’s wear fashion brand “Barcelona”, has decided to withdraw its Rs 200 crore-Initial Public Offering (IPO).The IPO was slated to be entirely a fresh issue of equity shares. Proceeds of the issue were to be used for expansion of the company’s retail network by launching exclusive brand outlets, enhancing the visibility and awareness of its brand for funding working capital requirements and general corporate proposals. The company had filed the Draft Red Herring Prospectus (DRHP) for the proposed IPO on June 17 with the Securities and Exchange Board of India (Sebi). However, the draft offer documents for the IPO were withdrawn on August 16 and the reasons for the withdrawal have not been disclosed, an update with the markets regulator showed on Tuesday. Incorporated in 2015, Stitched Textiles is mainly into men’s wear and deals in suiting and shirting fabrics. It operates around 85 stores in franchisee model in more than 50 cities in India, as of now. It offers its products under the brand ‘Barcelona’. Earlier this year, Nandan Terry, part of the Chiripal group, and Uma Converter withdrew their proposed IPOs.
However, he believes that the impact on the Indian market is going to be temporary since there could be some short-term impact on flows into Indian equity markets. But since the Indian economy is on a strong wicket and will continue to remain resilient.
“Improved fiscal situation, controlled current deficit, stable interest scenario combined with good corporate earnings should lead to limited impact on the Indian bond market and equity market too,” he added.
The midcap and smallcap indices took a bigger knock with the BSE MidCap fell 2.51%, while BSE SmallCap index dived 4.18%. According to Amnish Aggarwal, head, research, Prabhudas Lilladher, the valuations were already high and some correction was expected. “If the situation sustains as it is then further correction can’t be ruled out,” Aggarwal said.
Telecommunication and industrials indices were the top laggards with BSE Telecommunication declining 3.82%, followed by BSE Industrials falling 3.26%. JSW Steel (-2.99%), Tata Steel (-2.52%) and Tata Consultancy Services (-2.44%) were the top losers of Sensex.
Surprisingly, both foreign portfolio investors and domestic institutional investors were net buyers today. While, FPIs net bought shares worth Rs 252.25 crore, DIIs have purchased shares worth Rs 1,111.84 crore, as per provisional data from exchanges.
Calling this a “normal phenomena” Pankaj Pandey, head, research, ICICI Direct said, “I will not really give too much weight to a single day buying figure. Amid concerns of elevated interest rate and geopolitical tensions, in a typical market cycle, 8-10% correction is possible at any point in time.”
The brunt of geopolitical conflict, elevated interest rates and rising crude oil prices was also felt by other Asian- Pacific markets. Jakarta Composite Index lost 1.57% followed by Shanghai Composite Index and PSEi, which fell 1.47% and 0.89%, respectively. Nikkei and KOSPI declined 0.83% and 0.76%.