Apparel makers/retailers IPOs yet to take off

Many privately-owned textile retailers

/manufacturers and garment manufacturers/retailers plan to get listed in the next few months. But it isn’t all hunky dory as the market sentiment has taken a downturn since Diwali and benchmark indices have fallen over 9 per cent in the past three weeks. Brokers say that companies may have to moderate their expectations if this downtrend persists.

Some of the big names in this run up to public listing include Future Ventures India, a subsidiary of Future Group. FVIL holds stakes in many single-brand outlets like John Miller, Biba, Scullers and Indigo Nation and aims to raise Rs 750 crores through an initial public offer (IPO). Another big name is the Mumbai-based discount retail chain, The Loot that wishes to raise Rs. 100 crores to fund its expansions into Tier II, III towns. A relatively smaller player, garment manufacturer Ankita Knitwear has filed a draft prospectus to mop up around Rs 25 crores. All these companies have filed their draft prospectuses and are awaiting approval from market regulator SEBI.

Ritesh Chandra, executive director and head of consumer group at Avendus Capital feels the recent buoyancy in the primary market has opened up avenues for raising public capital for some small-and medium sized retailers. However, companies will have to gear up their internal systems and processes and prepare for quarterly performance pressures and more operational transparencies.

According to an analyst, for retailers scaling up operations is a major challenge and will always have to keep in mind that over leverage can lead to a liquidity crunch.