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Biba files draft IPO paper, plans to raise over Rs 90 cr via fresh issue, OFS; Warburg Pincus to sell stake

Biba plans to offer for sale 2.77 crore shares of the company in the IPO, according to the Draft Red Herring Prospectus (DRHP) filed with SEBI on Monday.

BIBA IPO, Biba DRHP
Fashion retailer Biba files draft papers for an IPO with SEBI.

Biba Fashion Limited has filed draft papers with the capital markets regulator SEBI to raise fresh capital of upto Rs 90 crore in aBiba Fashion Limited, the fashion retailer, has filed draft papers with the capital markets regulator SEBI for an initial public offering (IPO) to raise fresh capital of upto Rs 90 crore along with an offer for sale (OFS). According to the Draft Red Herring Prospectus (DRHP) filed with SEBI on Monday, the OFS part will consist of 2.77 crore equity shares of the company. Promoter Meena Bindra and investors Faering Capital and Warburg Pincus backed Highdell Investment will be selling their stakes, the DRHP added.

Private equity firm Faering Capital, which owns 4.4 per cent stake in the company, plans to sell 1.84 crore shares while Highdell Investment, which owns nearly 30 per cent stake in the company, plans to sell 55.8 lakh shares. Promoter Meena Bindra owns over 5 per cent share of the company and intends to sell 37.5 lakh shares through the IPO. 

The company is headquartered in Gurugram, Haryana and identifies itself as one of the largest consumer lifestyle brands in the country and leading market prominence in women’s Indian wear. Through the capital raise, the company said it plans to use Rs 70 crore of the total amount to repay or prepay its borrowings. As of December 31, 2022, the company’s total borrowings stood at Rs 70.07 crore.

For the first nine months of FY 2022, company’s revenues stood at Rs 487.68 crore. Profit for the first nine months of FY 2022 stood at Rs 18.24 crore, which compares with loss of Rs 11.84 crore in FY 2021. Pre-pandemic, the company’s profit stood at Rs 8.90 crore in FY 2022. The company said because of the COVID-19 pandemic, its operations had significantly slowed down during early 2020 and it witnessed almost a 50 per cent fall in its offline sales between financial years 2020 and 2021. It however saw a growth in online sales. 

The company listed the highly competitive Indian apparel industry as a risk to its business and said several regional brands and unorganized retailers are now present in local markets across the country in comparison to when it started. 

The DRHP comes months after Indian apparel maker Vedant Fashions, popularly known by its brand name Manyavar, also listed on the stock exchange in February this year. The company made a modest listing on stock exchanges and its stocks opened over 8 per cent up from the IPO price. Another rival, FabIndia also filed draft papers in January.

JM Financial, Ambit Private Ltd and aHSBC Securities are among the lead book running managers for the IPO.

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