Definition of Cancellation

The company issuing shares can cancel the offering for another form of financing, when an IPO process faces difficulties in getting investors to raise the required capital for it.

Points to remember:

• A cancelled deal can indicate a failure of an IPO.

Example:

• Scotts Garments’ IPO withdrew its IPO in 2013 amid sluggish investor sentiments as the company received bids for only 27 per cent of the 1.05-crore shares on offer.