The following article provides you with an overview of various IPOs from 2015 that were withdrawn in India, addressing the question “How many IPOs have withdrawn in India?” and exploring what leads to IPO withdrawal. Each entry includes a brief description of the company, issue size, open and close dates, overall subscription rates, and reasons for withdrawal.
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What Leads to IPO Withdrawal?
IPO withdrawals in India can occur due to weak investor demand, unfavourable market conditions, strategic corporate decisions, regulatory delays, or failure to meet minimum subscription requirements. Companies reassess their offerings based on economic factors and investor behaviour, ensuring they choose the right time to enter the public market.
Mandatory withdrawal of an Initial Public Offering (IPO) in India can occur under specific circumstances as outlined by the Securities and Exchange Board of India (SEBI). Here are the key reasons leading to such mandatory withdrawals:
Reasons for Mandatory Withdrawal of IPO
- Failure to Meet Minimum Subscription: If an IPO does not achieve at least 90% of the net offer in subscriptions, it must be withdrawn.
- Insufficient Allottees: If the number of allottees is less than 1,000, the IPO must be withdrawn.
- QIB Allocation Issues: For issues targeting Qualified Institutional Buyers (QIBs), if less than 75% of the total offer is allotted to QIBs, the entire subscription amount must be returned to investors, leading to a mandatory withdrawal.
- Regulatory Intervention: SEBI may mandate withdrawal if it identifies manipulative practices, such as artificially inflating subscription numbers by withdrawing applications post-closure or other irregularities. For instance, in the C2C Advanced IPO, SEBI intervened and mandated the appointment of independent auditors to review the company’s financial statements. This led to a delay in the IPO listing and allowed investors to withdraw their bids.
- Lack of Listing Permission: If a company fails to secure listing permission from stock exchanges within a stipulated timeframe after the IPO closure, it is required to refund the application money and withdraw the IPO.
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Trafiksol ITS Technologies IPO
Trafiksol ITS Technologies specializes in Intelligent Transportation Systems (ITS), offering solutions for traffic management and toll systems. The company aimed to raise INR 44.87 crores through its IPO, which opened between 10 – 12 September 2024. The IPO was subscribed 345.65 times, with retail investors showing significant interest at 317.66 times and non-institutional investors at 699.40 times.
However, the IPO of Trafiksol was cancelled because SEBI found that the third-party vendor involved in the IPO had questionable financials and was likely a shell entity, as evidenced by a locked office during inspection and fabricated credentials.
PKH Ventures IPO
PKH Ventures focuses on real estate and infrastructure development. The company planned to raise INR 379 crores through its IPO that opened on 30 June and closed on 4 July 2023. The overall subscription rate was 65%, leading to withdrawal due to adverse market conditions and insufficient investor interest.
Adani Enterprises FPO
Adani Enterprises proposed a Follow-on Public Offer (FPO) aiming to raise around INR 20,000 crores. The FPO was scheduled from 27 – 31 January 2023 and received 112% subscription on strong QIB and HNI demand. However, retail and employee subscription was low at 12% and 55%, respectively. Amid the volatility in wider markets, the company decided to withdraw the offer and returned capital to investors.
Antony Waste Handling Cell IPO
Antony Waste Handling Cell intended to raise about INR 300 crores through its IPO scheduled from 4 – 6 March 2020 but due to lack of subscription, the issue was extended to 16 March 2020. Even after extension, the subscription rate stood at just 0.50 times, leading to withdrawal of the issue as potential investors were wary of the sector’s regulatory challenges.
It is important to highlight that the company tried its luck again in the market and got success in December 2020 with a positive listing.
ITI FPO
ITI sought to raise INR 1,400 crores through an FPO, scheduled from 24 January to 5 February 2020. Despite two extensions of the bidding period and adjustment to the price band from INR 72 -77 per share to INR 71 – 77 per share, the FPO was only subscribed 62%. As a result, it was withdrawn in consultation with book running lead manager.
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Tutorials Point (India) IPO
Tutorials Point IPO aimed to raise around INR 20.10 crores through an SME IPO and the offer opened on 30 September 2019. By 4 October, the IPO was subscribed only 15%. It was then withdrawn in consultation with book running lead manager without seeking further extension or revision in price band.
Alumilite Architecturals IPO
Alumilite Architecturals planned an IPO seeking INR 11.48 crores for expanding manufacturing capabilities in architectural products. IPO bidding started on 24 June and closed successfully on 28 June 2019 with overall subscription of 103%. Nevertheless, the SME IPO’s subscription in the retail category was abysmally low at 68%. As a result, the IPO was withdrawn after consultation with BRLM Finshore Management Services.
Dinesh Engineers IPO
Dinesh Engineers aimed for an IPO of around INR 200 crores focused on engineering services. The offer opened on 28 September and closed on 3 October 2018. INR 185 crore IPO received a very poor subscription. The issue was subscribed only 0.08 times. It was withdrawn after failing to meet minimum subscription thresholds.
Sorich Foils IPO
Sorich Foils IPO planned to raise INR 4 crores to enhance production capacity in packaging materials. The IPO opened on 24 May 2018 but was promptly withdrawn on 25 May 2018 following poor demand which resulted in subscription of just 18%.
In a filing to NSE, the company said, “The management has envisaged a project for which the capital requirements will be difficult than what is contemplated from the current IPO and hence evaluating other fund-raising options. Secondly, in view of the tepid response for our IPO, the Board feels the time is not apt presently to take our company public and in view of this our Board of Directors met today morning and has unanimously deceived to withdraw the IPO.”
GreenSignal Bio Pharma IPO
GreenSignal Bio Pharma proposed an IPO for expanding pharmaceutical research capabilities. The IPO opened on 9 November 2016 and was extended to 22 November 2016. The overall subscription of the IPO was 102%. Book Running Lead Managers to the GreenSignal Bio Pharma, had informed the Exchange that according to 26 (2) of SEBI (ICDR) Regulations, if 75% of the net offer to the public cannot be allotted to QIBs, the entire application money shall be refunded forthwith. This led to the IPO withdrawal of GreenSignal BioPharma.
NCML Industries IPO
Focused on agribusiness solutions, NCML Industries intended to raise approximately INR 54 crores through an IPO. The offer opened on 29 December 2014 and following poor demand, it was extended to 9 January 2015. The extension failed to enthuse investors and the issue was subscribed only 45% and was eventually withdrawn.
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In conclusion, factors leading to these withdrawals include unfavourable market conditions, internal corporate matters, and timing issues related to regulatory approvals. Understanding these dynamics is crucial for stakeholders as they navigate the complexities surrounding IPO withdrawal in India.
