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Four Seasons Residency withdraws IPO plan

Mukul Mudgal/VCCircle

Ahmedabad-based hospitality firm Four Seasons Residency Ltd has withdrawn its plan for an initial public offering, less than a month after filing draft papers for the share sale.

Four Seasons had filed its draft red herring prospectus with the capital markets regulator Securities and Exchange Board of India on 20 February and withdrew the document on 9 March, the SEBI website shows.

This is the first retraction of IPO papers in nearly two years. Gurgaon-based auto component maker MM Auto Industries Ltd had withdrawn its IPO plans in April 2015 after having filed its draft prospectus with SEBI a month prior. Videocon DTH Ltd and CL Educate Ltd had also withdrawn their IPO applications in March and April 2015, respectively.

CL Educate refiled IPO documents last year and its IPO is currently underway. 

There have also been a few instances in recent months of companies that launched their IPOs but failed to conclude the fundraise. GreenSignal Bio Pharma Ltd cancelled its IPO in November last year due to market volatility resulting from the outflow of capital from secondary markets after the government banned high-value currency notes to fight corruption and tax evasion.

In December 2016, online matchmaking and marriage services provider Matrimony.com Pvt. Ltd scrapped IPO plans with just days remaining for its regulatory approval to lapse. The Chennai-based company, which owns Bharatmatrimony.com, joined a dozen other companies that didn’t launch their IPOs last year despite SEBI approval.

Four Seasons
Four Seasons had aimed to raise Rs 125-150 crore ($18-22 million) through the IPO that would have resulted in a 38.89% stake dilution. The company intended to use the money for setting up a hotel and other purposes.

Four Seasons was incorporated in April 2009 with the aim to build a 230-room hotel, The Westin, off the Gandhinagar-Ahmedabad road. It is scheduled to go public on 1 April 2020. At present, there is no business activity in the company.

The company counts Viral M Shah (3.07% stake) and Rupen M Modi (0.06% stake) as promoters and Sampati Securities Ltd (75.48% stake) as its promoter-group company.

Meanwhile, state-owned Housing and Urban Development Corporation Ltd (Hudco) has received regulatory clearance for its IPO from SEBI.

Hudco’s IPO, which will see the government sell 10% stake as part of its disinvestment programme, received final approval from SEBI on 10 March. It had filed its draft documents on 2 January.

Hudco becomes the 10th company to receive regulatory clearance for an IPO this calendar year.

The government will sell 200.2 million shares in Hudco through the IPO, according to the draft red herring prospectus. Hudco’s share sale will be the first IPO of a state-run company since March 2012, when National Buildings Construction Corporation Ltd floated a public issue worth Rs 125 crore.

Apart from Hudco, the Centre intends to initiate share sale in unlisted companies such as aerospace and defence company Hindustan Aeronautics Ltd, shipbuilding and maintenance company Cochin Shipyard Ltd and Airport Authority of India Ltd, among half a dozen firms.

For more details on the Hudco IPO, click here

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