Scotts Garments withdraws IPO due to timid response

After Sai Silks, readymade fashion garments manufacturer

Scotts Garments has withdrawn its initial public offering owing to poor subscription response despite its low price band and extension of subscription period. The company extended the issue’s closing date to May 3 from April 29, 2013 earlier. It also lowered the price band to Rs 118-120 from the earlier Rs 130-132 per share.

Even after extending the subscription period, Scotts Garments could attract just two per cent subscription. Till April 29, the issue was subscribed 25 percent. So the total subscription was 27 percent on Friday last week. The Rs 126-crores issue received bids for 28.17 lakh shares as against 1.05 crores shares on offer, as per data available with NSE.

At present, the Bangalore-based garment export company has 24 manufacturing units in Karnataka and Tamil Nadu and 95 percent of its products are exported mainly to the US, the UK, Europe and China. The company planned to use the funds for setting up of unit for trouser manufacturing at Doddaballapur, Karnataka and knitting & fabric processing unit at Kagal in Kolhapur.

Keynote Corporate Services and Canara Bank Merchant Banking Division are the book running lead managers (BRLM) to the issue. Link Intime India is the registrar. Scotts Garments is the second company in 2013 that investors avoided for subscription. It may be recalled, Sai Silks (Kalamandir) withdrew its public issue in February due to the same reasons.