Biba Fashion files IPO papers

Ethnic wear brand Biba Fashion has filed its draft red herring prospectus with market regulator Securities and Exchange Board of India (SEBI) as it looks to raise funds through an initial public offering (IPO).

The IPO comprises fresh equity issuance worth ₹90 crore and an offer for sale (OFS) component of 2.77 crore equity shares by promoter and existing investors, according to the draft red herring prospectus (DRHP).

As a part of the offer for sale, promoter Meena Bindra will sell up to 37.52 lakh equity shares. Existing investors, including Warburg Pincus-backed Highdell Investment and Faering Capital India Evolving Fund, will offload up to 1.84 crore and 55.86 lakh equity shares, respectively.

The women's fashion brand plans to use the fund raised through the fresh issuance of equity shares to repay debt.

According to consulting firm Technopak Advisors, the women's apparel market in India was estimated at $21.8 billion, or 36%, of the total apparel market in India, as of financial year 2020, and is expected to outgrow other major market segments, such as menswear and kidswear, and is expected to reach $33.8 billion by financial year 2025.

Within the women’s apparel market, women’s Indian wear is the dominant segment and the preferred form of dress for approximately 71% of the market, as of financial year 2020, the report said. The market is shifting rapidly towards branded and organized offerings.

Biba provides mid-premium to premium offerings across ethnic women wear. In 2018, the company extended the core offering under this brand into adjacent product categories, such as jewellery, footwear, wallets and fragrances.

The company sells its products at physical retail stores as well as through online channels.

The IPO comes at a time when footfalls at malls are expected to reach pre-Covid-19 levels in the financial year 2022-23.

“The footfalls are expected to reach pre-Covid levels in FY2023, however, the average spend per footfall is likely to witness some moderation when compared to FY2021-FY022,” Mathew Kurian Eranat, vice president and co-group head, ICRA, said in a note.

In February, Vedant Fashions, which owns ethnic wear brand Manyavar, made a decent debut on the domestic exchanges with shares of the company listing at a 8% premium to issue price of ₹866 on BSE.