Vedant Fashions Ltd, which owns ethnic wear brand Manyavar, has received capital markets regulator Sebi's go ahead to raise funds through an initial share-sale.

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The initial public offering (IPO) is purely an offer-for-sale of 36,364,838 equity shares by promoter and existing shareholders, according to the Draft Red Herring Prospectus (DRHP).

The offer-for-sale comprises sale of up to 1.74 crore shares by Rhine Holdings Ltd; up to 7.23 lakh shares by Kedaara Capital Alternative Investment Fund-Kedaara Capital AIF I; and up to 1.81 crore shares by Ravi Modi Family Trust.

The company, which had filed its preliminary IPO papers with Sebi in September, obtained its observation letter on January 18, an update with Sebi showed on Monday.

In Sebi's parlance, observation implies approval to launch the IPO.

The promoters of the company are Ravi Modi, Shilpi Modi and Ravi Modi Family Trust.

Since, the IPO is entirely an offer-for-sale, the company will not receive any proceeds from the public issue.

Vedant Fashions' "Manyavar" brand is a category leader in the branded Indian wedding and celebration wear market with a pan India presence. The company's other brands include Twamev, Manthan, Mohey, and Mebaz.

As of June 30, 2021, the company has a retail network with 537 exclusive brand outlets (EBOs), including 55 shop-in-shops globally. It has 12 overseas EBOs across the United States, Canada and the UAE, which are countries with a large Indian diaspora.

"We seek to grow our retail network and product reach by entering new geographies, including in tier-II and III towns and cities in India, as we believe that these markets offer significant growth opportunities for us," the company had said in the draft papers.

Axis Capital, Edelweiss Financial Services, ICICI Securities, IIFL Securities and Kotak Mahindra Capital are the book running lead managers to the issue.