AuMake’s market value has dropped 12 per cent after the retailer scrapped a $20 million capital raising, citing share price volatility.

AuMake, which sells Australian goods to Chinese tourists and so-called daigou for export, said it had cancelled the raising after the underwriter pulled out.

“The company considers this action reasonable given recent share price volatility,” AuMake said in a statement.

As a result, AuMake will refund all application monies received, withdraw its entitlement offer and its shortfall offer, and will instead raise $14 million through a placement priced at 45 cents a share.

AuMake shares 12.3 per cent, or by 6.5 cents, to 46.5 cents.

The company joined the ASX in October following a reverse takeover of a former gas and drilling company, and wanted to raise $20 million through a 63 cents per share offer to existing shareholders.

The proceeds were to be used to increase the company’s store network from six in Sydney to at least 20 nationwide by mid-2019.

AuMake on Wednesday said it has received firm commitments from investors in Australia and China for the new placement – and that it will be able to accelerate its store rollout.

AuMake sells Australian cosmetics, vitamins, long-life milk, baby products, and wool and leather products to shoppers for export to China.