XED Executive Development, the first company to launch an initial public offering (IPO) in GIFT City, withdrew its $12 million share sale on Monday, citing weak investor demand amid global uncertainties.
“The company has decided to withdraw the public issue in the current environment and hopes to tap the market at an appropriate time in the future,” it said, adding that it informed GIFT City-IFSC authorities and the listing exchanges.
Data from NSE International Exchange showed the issue garnered bids for only about 5 per cent of the offer size, despite the company extending the subscription window.
The company had earlier also extended its subscription period following initial operational challenges. XED added that the decision to withdraw was driven by a ‘combination of factors beyond its control’.
“Despite strong retail interest in the offering, a significant portion of prospective retail applicants were unable to complete their bids within the offering window owing to KYC-related procedural bottlenecks, resulting in a material gap between expressed interest and actual subscription,” it added.
On the other hand, institutional investors remained cautious amid ongoing global uncertainties. Further, elevated volatility and compressed liquidity carried a risk of post-listing price pressure, leading to the company withdrawing even after the subscription level was above the minimum threshold.
Industry players termed the decision by the company a major setback for the International Financial Services Centres (IFSC), which is trying to make a mark among the more popular financial hubs of the world.
A source added that the tepid demand was also on account of restrictions on resident Indians from investing in IPOs in GIFT-IFSC — a move which requires amendments to regulations. Sources added that other companies which were in discussions for IPOs may also step back given the challenges.
