How Many IPOs Have Withdrawn In India?

December 4, 2024

The following article provides you with an overview of various IPOs from 2015 that were withdrawn in India, addressing the question “How many IPOs have withdrawn in India?”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.

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to Meet Minimum Subscription: If an IPO does not achieve at least 90% of the net offer in subscriptions, it must be withdrawn.
Insufficient Allottees: If the number of allottees is less than 1,000, the IPO must be withdrawn.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.

Read Also: How to Find Good IPOs?

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 from 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. The IPO of Trafiksol is 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 was 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, the offer was subscribed 112%, the FPO faced withdrawal as investor sentiment shifted negatively amidst broader market corrections.

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 is extended to 16 March 2020. The subscription rate was 0.50 times during the offer period, leading to withdrawal as potential investors were wary of the sector’s regulatory challenges.

ITI FPO

ITI sought to raise INR 2,000 crores through an FPO in late 2015, scheduled from 24 January to 5 February. By the time IPO was only subscribed 62%, despite two extensions of the bidding period and adjustments to the price band. It was then withdrawn in consultation with book running lead manager.

Tutorials Point (India) IPO

Tutorials Point (India) aimed for an IPO of around INR 20.10 crores, the IPO was opened on 30 September and closed on 4 October 2019. By the time IPO was only subscribed 0.15%. It was then withdrawn in consultation with book running lead manager.

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 on 28 June 2019 but was ultimately withdrawn due to weak market conditions and concerns over growth projections that deterred potential investors.

Dinesh Engineers Limited IPO

Dinesh Engineers Limited aimed for an IPO of around INR 200 crores focused on engineering services. The offer was 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 Limited IPO

Sorich Foils IPO planned to raise INR 4 crores to enhance production capacity in packaging materials. The offering was opened on 24 May and closed on 25 May 2018. During the period IPO only received 0.18 times the subscription.

Sorich Foils IPO has been withdrawn after notice was received by NSE. The management of the IPO envisaged a project for which the capital requirements will be more difficult than what is contemplated from the current IPO and hence evaluating other fund-raising options. Secondly, given the tepid response to the IPO, the Board felt the time was not apt presently to take the company public.

GreenSignal Bio Pharma IPO

GreenSignal Bio Pharma proposed an IPO for expanding pharmaceutical research capabilities. The IPO was opened on 9 November 2016 and extended to 22 November 2016. The overall subscription of the IPO was 102%. Book Running Lead Managers to the GreenSignal Bio Pharma Limited, 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. Hence, led to the IPO withdrawal of GreenSignal BioPharma.

NCML Industries IPO

NCML Industries intended to raise approximately INR 54 crores through an IPO focused on agribusiness solutions. The IPO was opened on 29 December 2014 and extended to 9 January 2015. Due to poor demand among investors, the issue only subscribed 45% and led to the IPO withdrawal.

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.

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