Biba Fashion, a well-known ethnic apparel brand, is planning an IPO and has submitted its preliminary paper to SEBI. The promoter and existing investors would issue equity shares worth Rs 90 crore and an OFS of 2.77 crore equity shares in the IPO. Meena Bindra, the promoter, will sell up to 37.52 lakh equity shares, while Warburg Pincus-backed Highdell Investment and Faering Capital India Evolving Fund will sell up to 1.84 crore and 55.86 lakh equity scrips, respectively.
Biba Fashion, funded by Warburg Pincus and Faering Capital, is one of India’s largest lifestyle brands in terms of market share in the women’s Indian wear sector. Our main brand, BIBA, was introduced in 1986. The company develops, designs, sources, markets, and sells a diverse portfolio of Indian wear for women and girls across numerous brands, meeting nearly all of a woman’s Indian wear demands, and also provides consumers with a variety of products including jewelry, footwear, wallets, and fragrances. The company was
initially focused on the Indian market but has since begun to expand abroad. It now has a presence in Canada, Nepal, and the UAE, and wants to expand its worldwide reach to the United States and Australia by the end of the first quarter of FY23. The product portfolio includes products from flagship brand Biba, Rangriti, BIBA by Rohit Bal BIBA Girls and its first fragrance under our beauty brand, Spelle.
The company also has a large online presence, operating through its own websites as well as third-party marketplaces such as Myntra, Amazon, Flipkart, Nykaa, and Tata Cliq. The business model’s digital emphasis gives the corporation a competitive advantage. It has 427 EBOs, 308 BIBA-branded outlets and 119 Rangriti-branded outlets spread over 27 states and 160 cities in India, 930 LFSs spread across 29 states and 267 cities in India, and 30 MBOs. EBOs can be found around the country in major metros, large cities, other tier II and tier III cities, and airports, as well as on high streets, malls, and residential market areas.
BIBA Fashion Financial Status
| Particulars | FY21 | FY20 | FY19 |
|---|---|---|---|
| Revenue From Operation | 4,498.16 | 3,018.06 | 2,011.80 |
| EBITDA | 1,161.32 | 737.31 | 496.04 |
| EBITDA Margin (%) | 25.59% | 24.27% | 24.40% |
| Profit After Tax | 711.19 | 399.56 | 233.35 |
| EPS | 7.36 | 4.24 | 2.48 |
| ROE | 40.79% | 51.04% | 60.54% |
Objectives of the BIBA IPO
The net proceeds from the fresh Issue will be used towards
- Funding of Repayment and /or prepayment of certain borrowings availed by the company estimated to be ₹70 crore
- General corporate purposes
BIBA Fashion Peer Comparison
| Name of the company | Face value (₹ per share) | Total Income (in ₹ million) | NAV (₹ per share) | RoNW (%) |
|---|---|---|---|---|
| TCNS Clothing Company Limited | 2.00 | 6,845.25 | 99.47 | 9.21% |
| Trent Limited | 1.00 | 27,945.60 | 65.07 | 6.32% |
| Go Fashion (India) Limited | 10.00 | 2,822.53 | 94.31 | 1.25% |
| Vedant Fashions Limited | 1.00 | 1,010.00 | 44.03 | 12.18% |
| Aditya Birla Fashion and Retail Ltd | 10.00 | 53,223.20 | 28.20 | 25.44% |
BIBA IPO Key Points
Strengths
- Leading market position and strong brand equity across a diverse set of consumers across the value chain
- Diversified pan-India multichannel distribution with a strong foothold on both offline and online channels
- Significant investments made in digital capabilities with a strong focus on technological efficiencies resulting in leadership online (across both marketplaces and our own websites)
- Strong in-house design and tech-first supply chain capabilities to deliver innovative and high-quality products
- Capital-efficient and scalable retail model to capitalise on the strong industry growth profile driven by secular tailwinds and a rapid shift towards organised retail and increasing online penetration
- Professional, founder-driven management team with deep industry expertise and track record, and backed by marquee private equity investors
Risks
- Highly concentrated on women’s Indian wear apparel and vulnerable to variations in demand and changes in consumer preferences
- Business prospects depend on the strength of the key brands, and any failure to maintain or grow sales of the products could adversely affect the business.
- Unsuccessful launch of new products
- Relies on outsourcing a significant proportion of the production processes and activities to third-parties, without exclusivity arrangement
- Inability to identify and retain skilled third-party suppliers, vendors and manufacturers for various parts of the production or procurement processes
BIBA IPO FAQs
Q1. What is the price band of the IPO?
Ans. The price band ranges between Rs. 610 to Rs. 643 per share
Q2. When does the Biba Fashion issue open and close?
Ans. Biba Fashion Limited IPO opens on May 24, 2022, and closes on May 26, 2022
Q3. What is the size of Biba Fashion IPO issue?
Ans. The IPO comprise a fresh issue of equity shares aggregating to Rs 627 crore and an offer-for-sale (OFS) of up to 28.2 lakh equity shares.
Q4. What is the allotment date of Biba Fashion IPO?
Ans. The allotment date for the IPO is May 31, 2022
Q5. What is the Biba Fashion IPO listing date?
Ans. The Biba Fashion IPO listing date is June 3, 2022
Q6. What is the lot size and investment required for the Biba Fashion IPO?
Ans. The Biba Fashion Limited IPO lot size is 23 shares. A retail investor can apply for minimum of 1 lot (13 shares or Rs. 14,766) and maximum up to 13 lots (299 shares or Rs. 191,958).
Q7. What is the objective of the issue?
Ans. The proceeds from the issue will be used in the following manner:
- Rs.136 crore is being kept aside for funding the capital expenditure requirements for the Greenfield project
- Rs.211.4 crore is to be used to repay or prepay debt availed by the company
- Rs.165 crore will be used to fund the working capital expenditure requirements of the company
Q8. Who are the promoters/key personnels of Biba Fashion?
Ans. Biba Fashion is promoted by Ashwin Jayantilal Desai, Purnima Ashwin Desai, Rohan Ashwin Desai, Dr. Aman Ashvin Desai, AJD Family Trust, PAD Family Trust, RAD Family Trust, AAD Family Trust and AAD Family Trust.
Q9. Who are the book runners for Biba Fashion IPO?
Ans. HDFC Bank Ltd and Kotak Mahindra Capital Company Ltd are the book running lead managers to the issue.
