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(Adds Credit Suisse participation, share price)
SAO PAULO, Oct 21 (Reuters) - JBS SA received regulatory approval to delay an initial public offering of its JBS Foods unit in Brazil, according to a securities filing on Tuesday, putting off a plan to raise 4 billion reais ($1.61 billion) for a few more weeks or until next year.
The São Paulo-based food processor and banks working on the offer are wary that volatility stemming from uncertainty about Sunday's presidential election may cloud sentiment ahead of potential investor meetings in the coming weeks, said a source with direct knowledge of the situation, who requested anonymity since the matter is private.
The request to make JBS Foods a public company was removed from securities industry watchdog CVM's website, but the application to file for the IPO remained there.
This was the third time since June that the unit of JBS SA , the world's largest meatpacker, has put the stock offering on hold. Shares of JBS SA dropped 5.44 percent on Tuesday.
Potential IPOs in the queue in Brazil include those of cellphone tower operator T4U Holding Brasil SA and heavy vehicle rental company Ouro Verde Locação e Serviço SA.
On Friday, shares of veterinary products maker Ouro Fino Saúde Animal Participações SA priced at the top of the suggested range, with investor demand for Brazil's first IPO of the year coming stronger than expected.
A number of investment firms that could be some of the JBS Foods IPO buyers voiced election-related worries to the company and bankers, the source said. Among the concerns were the effect of a victory by President Dilma Rousseff on risk perception, as well as reduced global liquidity and a domestic recession.
The benchmark Bovespa stock index tumbled as much as 4 percent on Tuesday, the third decline in four days, after polls showed Rousseff with a slight lead. Opposition candidate Aecio Neves is seen as more business-friendly than Rousseff.
JBS Foods accounted for nearly 10 percent of JBS's $40 billion in revenue last year. JBS aims to list JBS Foods on the São Paulo Stock Exchange's Novo Mercado, which has tougher corporate governance standards and requires that a company list at least 25 percent of its shares.
The company hired the investment-banking units of Bank of America Corp, Itaú Unibanco Holding SA, Banco Bradesco SA, Grupo BTG Pactual SA, Banco do Brasil SA, HSBC Holdings Plc, Banco Santander SA and Credit Suisse Group AG to oversee the transaction.
Shares of JBS SA fell 4.75 percent on Tuesday, while Brazil's benchmark Bovespa index slid 3.44 percent.
$1 = 2.48 Brazilian reais Reporting by Guillermo Parra-Bernal; Additional reporting by Gustavo Bonato; Editing by Lisa Von Ahn and Gunna Dickson