Biba Apparels IPO: Indian Fashion House Files DRHP for IPO

Indian fashion house Biba Apparels has filed the draft red herring prospectus (DRHP) with market regulator Securities and Exchange Board of India (SEBI) to raise funds through an initial public offering (IPO).

Biba Apparels IPO comprises fresh issuance of equity shares worth Rs 90 crore and an offer for sale (OFS) of 2.77 crore equity shares by promoter and existing investors. 

According to the DRHP, promoter Meena Bindra will sell up to 37.52 lakh equity shares, and private equity investors, Warburg Pincus-backed Highdell Investment and Faering Capital India Evolving Fund will offload up to 1.84 crore and 55.86 lakh equity scrips, respectively.

Biba Apparels plans to use the fund raised through the fresh issuance to repay debt and for general corporate purposes. 

JM Financial, HSBC Securities, DAM Capital, Equirus Capital and Ambit Capital are the book running lead managers of the Biba Apparels IPO, per reports.

The company in its DRHP said: “While our operations had significantly slowed down during early 2020 and we have almost resumed to full normalcy with requisite precautions, the actual impact of Covid-19 pandemic on our financial condition remains uncertain.”

The Gurgaon-based company said that while the pandemic has severely impacted the sales at its offline stores, its online channels have kept operations afloat.

“We witnessed a 48.79% drop in offline sales between financial years 2020 and 2021 and recorded a loss for the year of Rs 118.40 million in fiscal 2021 on account of the impact of Covid-19 on our operations, among others.”

“However, we have since seen a recovery in our operations and witnessed a 76.05% growth in sales from online channels between financial years 2020 and 2021, accelerated by the growth in the number of online shoppers in India,” it added.

Biba Apparels is the latest in the spate of domestic fashion labels that have made a run for the Dalal Street in recent months.

Late last year, Sequoia Capital-backed women’s bottom-wear brand Go Colours raised Rs 1,014 crore via its IPO. Other companies like FabIndia have also filed papers for an IPO in January this year.

According to a Technopak report, India’s women’s apparel market is estimated at $21.8 billion, about 36% of the total apparel market, as of the financial year 2020. It is expected to reach $33.8 billion by the financial year 2025 and may outgrow other major market segments such as menswear and kidswear.

About Biba Apparels 

Meena Bindra founded Biba Apparels in 1988 as a women’s ethnic wear company. It has since forayed into jewellery, fragrance and footwear segments.

According to media reports, Biba Apparels has over 285 stores across 120 cities. It has a distribution system of 285 exclusive stores, 400 touch points in Multi Brand Outlets and leading E-Commerce platforms. It is present in major retail chains like Shopper’s Stop, Lifestyle, Pantaloons, and Central.

Biba Apparels also has a 26.66 percent stake in the designer label Anju Modi’s fashion line Anjuman Brand Designs.

Last year in November, in an interview with the Financial Express, Siddharath Bindra, MD Biba Apparels, said the company would be looking at tier II and tier III cities for expansion and plans “to add 200 stores over the next three years.”

FAQs:
What is an IPO?

An initial public offering (IPO) is the process of offering shares of a private company to the general public for the first time. After the IPO, shares of the company are listed and traded on the stock exchanges. 

How can I apply for an IPO?

To apply for an IPO, you require the following: demat account, trading account, mobile number linked to bank account and UPI ID.

If you wish to invest in an IPO, log into your trading platform. Go to the IPO section; select investor type and IPO you want to apply for; enter number of shares, bid price and UPI ID.

What is DRHP?

DRHP or Draft Red Herring Prospectus, also known as ‘offer document’ or ‘preliminary registration document’ is a document a company must submit to SEBI if they plan to raise money via IPO.

The DRHP contains all necessary information about the company’s business operations, promoters, financials, its position in the industry, and peers.

Who are book running lead managers in an IPO?

Lead managers are large financial institutions such as investment banks that help a company throughout the IPO process to ensure a successful initial public offering. 

What should I keep in mind before investing in an IPO?

There are market risks involved in investing in shares. It is always advisable to research on the company well or take advice from investment advisors before investing in shares.