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Warbug Pincus-backed Biba Fashions IPO put on hold by SEBI; issue may compete with Aditya Birla upon listing

Warbug-Pincus-backed Biba Fashions IPO has been put in abeyance by the capital market regulator SEBI

Biba Fashions, IPO
SEBI said 'issuance of observations kept in abeyance' with regard to the proposed initial share sale of ethnic wear fashion label Biba Fashion

Warbug-Pincus-backed Biba Fashions IPO has been put in abeyance by the capital market regulator Securities and Exchange Board of India, an update on the SEBI’s website showed on Monday. The company filed a draft red herring prospectus with the SEBI on 12 April to raise funds through an initial public offering (IPO). SEBI said ‘issuance of observations kept in abeyance’ with regard to the proposed initial share sale of ethnic wear fashion label Biba Fashion. According to the Biba Fashions’ DRHP, the IPO comprises fresh issue of equity shares worth Rs 90 crore and an offer for sale (OFS) of 2.77 crore equity shares by promoter and existing investors.  

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As a part of the OFS, 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. The book running lead managers to the issue include JM Financial, Ambit Private Ltd, DAM Capital Advisors, Equirus Capital, and HSBC Securities and Capital Markets. Link Intime India is the registrar to the Biba Fashions IPO.

Upon successful listing on stock markets, Biba Fashions will join the likes of TCNS Clothing Company, Trent, Go Fashion (India), Vedant Fashions, and Aditya Birla Fashion and Retail. The average industry peer group P/E ratio stands at 188.61x. Biba Fashions develops, designs, sources, markets and sells a wide portfolio of Indian wear for women and girls across multiple brands, catering to almost all of a woman’s Indian wear needs and also offers consumers a range of products across jewellery, footwear, wallets and fragrances.

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The company plans to utilise net proceeds towards repayment or payment of certain borrowings availed by the company worth Rs 70 crore and for general corporate purposes. Launched in 1986, company’s flagship brand ‘BIBA’ is a ‘category creator’ in the women’s Indian wear segment. According to the Technopak report, the women’s apparel market in India was estimated at $ 21.8 bn, 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 bn 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.

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