Biba Apparels files DRHP with SEBI for Rs.1,500 crore IPO

It looks like fashion houses are seeing a good opportunity in the IPO market and the latest to follow that line is Biba Apparels, which has just filed for its Rs.1,500 crore IPO.

The draft red herring prospectus (DRHP) has just been filed with SEBI and the regulator typically takes around 2-3 months to give observations on the DRHP (tantamount to IPO approval). Hence, the company is likely to be planning its IPO sometimes around July or August this year.

Biba Apparels is one more in the line of fashion apparels that have recently hit the IPO market to raise funds. Just a couple of months back, we had the IPOs of Go Colors and then the IPO of Vedant Fashions (owners of the famous Manyavar brand of ethnic wear) tapping the IPO markets.

Both had successful listings in the secondary markets. Biba Apparels is obviously looking to capitalize on that trend by announcing the IPO at this point of time.

Biba Apparels is backed by private equity funds like Warburg Pincus and Faering Capital. Faering Capital was floated by Aditya Parekh (son of Deepak Parekh of HDFC fame), along with Sameer Shroff, and the fund currently manages an investment portfolio of around Rs.3,800 crore.

The IPO would raise a very small amount by way of fresh issue but the IPO would predominantly target at giving an exit to early investors like promoters and PE funds.

Biba filed its draft papers with a view to raising around Rs.1,500 crore through the public issue. Out of the total issue, Rs.100 crore will be by way of fresh issue while Rs.1,400 crore will by way of an offer for sale (OFS) by existing shareholders.
 

The book running lead managers (BRLMs) to the issue are JM Financial, HSBC Securities, DAM Capital (formerly IDFC Securities), Equirus Capital and Ambit Capital. More details are expected on the IPO.

It was in December 2013 that Warburg Pincus and Faering Capital made the biggest investment in an ethnic wear Indian brand at that point of time, of Rs.300 crore.

This stake was bought by the two PE funds from Future Lifestyle Fashions, which had exited Biba Apparels through the stake sale.

Biba was founded in 1988 by designer Meena Bindra, and the word Biba literally means a pretty woman in the native Punjabi language. 

Today, Biba has become a formidable brand and has also entered the jewellery and footwear segments, apart from its diversification into the fragrance vertical. The Biba network is currently present across more than 120 cities in India and it has already opened its 300th store in Jaipur.

Apart from having its own exclusive outlets, Biba is also present in major all-India level retail chains like Shopper's Stop, Lifestyle, Reliance etc.

In terms of strategy, Biba is looking at Tier-2 and Tier-3 cities and towns for lateral expansion and the company plans to add about 200 brand stores in the next 3 years.

The company has already adopted an omni-channel approach with ecommerce contributing nearly 25% of total sales and this focus of ecommerce is being sharpened to ensure that it touches 35% in 3 years. That is going to be a lot of seamless and lateral growth for Biba.

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