Pune-based corporate training and digital learning firm Wagons Learning has withdrawn its ₹38 crore initial public offering (IPO), which was scheduled to close on May 6, 2025. The move comes amid a turbulent stock market environment and weak investor sentiment, particularly in the SME segment.

The announcement was made via a statement issued by BSE, which said that the company, in consultation with its merchant banker Khandwala Securities, decided to call off the IPO due to “prevailing market conditions.”

First SME IPO Withdrawal Since Trafiksol in 2024

This withdrawal marks the first SME IPO cancellation since Trafiksol ITS Technologies had to refund investors following a SEBI order in December 2024. Trafiksol’s public issue was launched in September last year but did not proceed due to regulatory and investor issues.

Wagons Learning's IPO withdrawal indicates mounting pressure on SME listings, where investor appetite has been notably subdued due to broader market volatility and cautious participation.

Details of the Withdrawn IPO Offer

Wagons Learning was aiming to raise a little over ₹38 crore, comprising both offer for sale and fresh issue components. Specifically:

• 16 lakh shares were to be offered under the Offer for Sale (OFS).

• 30.8 lakh shares were slated for fresh issuance.

• The price band was set between ₹78 and ₹82 per share.

According to the Draft Red Herring Prospectus (DRHP), the company intended to use the IPO proceeds for:

• ₹7.5 crore – to meet working capital requirements.

• ₹4.5 crore – for prepayment or repayment of borrowings.

• Remaining funds were to be allocated towards general corporate purposes and business expansion.

Background of Wagons Learning

Founded in 2013, Wagons Learning Ltd is a corporate training and digital learning solution provider, operating primarily on a B2B model. The company’s service offerings include:

• Training and Certifications

• Digital Learning Solutions

• Skill Development Programs

• Trainer Outsourcing

• Payroll Management

It serves corporate clients and works with various industry partners to support employee training and upskilling.

Promoted by Uday Jagannath Shetty and Raviraj Poojary, the company is headquartered in Pune, Maharashtra.

Financial Performance Before IPO Filing

For the financial year ending March 31, 2024, Wagons Learning reported:

• Profit After Tax (PAT): ₹5.6 crore

• Net Profit (Dec 2024 YTD): ₹5.54 crore

These numbers suggest that the company was on track to maintain consistent profitability, making the IPO withdrawal a strategic move rather than a result of internal weakness.

Identified Risk Factors in DRHP

Despite a stable financial profile, the company acknowledged multiple risk factors in its IPO document:

• Delays in regulatory filings, including those required under GST and EPFO provisions.

• Intellectual property concerns: The company has not secured IP rights for many of its online courses, software, or training material.

• Conflicts of interest: Potential overlaps with business objectives of group companies.

Such disclosures are crucial in understanding the operational and regulatory challenges that may have influenced investor interest and merchant banker advice on withdrawing the IPO.

Market Conditions Likely Triggered the Withdrawal

The overall IPO market in 2025 has seen increasing volatility, with investors becoming selective and risk-averse, especially in the SME segment. Broader equity indices have struggled amid:

• Foreign institutional selling

• Geopolitical tensions

• Economic uncertainty

Under these conditions, public issues that lack a strong retail pull or marquee institutional interest often face subscription challenges.

Given this scenario, both Wagons Learning and Khandwala Securities likely assessed that proceeding with the IPO could result in a sub-optimal response or listing underperformance.

What This Means for SME IPOs in India

The SME IPO segment, while offering high-growth opportunities, often struggles with limited investor education, lower liquidity, and valuation concerns. The Wagons Learning withdrawal:

• Signals caution among promoters and bankers about entering the market without robust demand backing.

• May prompt other companies to reassess their IPO plans or delay listings.

• Highlights the need for stronger corporate governance and IP protections among training and tech-based startups.

In the medium term, SEBI and exchanges may introduce additional investor safeguards and listing regulations to restore confidence in SME offerings.

Conclusion

Wagons Learning’s IPO withdrawal is a reminder of the importance of timing, investor sentiment, and market readiness for a successful public offering. Despite a promising business model and consistent profitability, the company’s decision to hold back its public issue highlights the challenges facing SMEs in a volatile market landscape.

For retail and institutional investors, this development also underscores the need to scrutinise risk factors, business fundamentals, and market conditions before investing in IPOs, particularly in the SME segment

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The Upcoming IPOs in this week and coming weeks are Virtual Galaxy Infotech.

The Current active IPO are Srigee DLM, Manoj Jewellers, Wagons Learning, Kenrik Industries.

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