BIBA Fashion Ltd. was founded by Mrs. Meera Bindra in 1988. Since its inception, BIBA Wear has positioned itself as synonymous with Indian outfit brands for every occasion.
To raise funds, this women’s ethnic wear brand has filed a Draft Red Herring Prospectus to SEBI in April 2022. However, the market regulator has ordered the company to put this plan on hold.
As the company waits for clarifications on the reasons for the pause in its IPO process, interested investors must analyse BIBA Fashion’s DRHP thoroughly.
This blog takes you through the crucial points of the DRHP to help you plan an investment strategy for BIBA Fashion Limited’s IPO.
Also Read: How does an IPO work?
Table of Content
About the Company
The home-grown fashion and ethnic wear brand owes its name to the Punjabi word ″Biba″ which means beautiful woman. Founded in 1986, BIBA became a category creator and revolutionised the Indian women’s wear segment.
BIBA Fashion Ltd. specialises in designing, manufacturing, sourcing, marketing and selling a diverse variety of Indian wear for women and girls. The company markets and sells these products under its flagship brand BIBA and fashion brand Rangriti.
Besides Indian festive and wedding outfits, BIBA caters to the needs of today’s Indian women for trendy and fashionable apparel. To cater to a wide variety of choices, the company brings to the table a wide range of office, casual and regular Indian wear.
As of February 2022, the company’s flagship brand held one of the highest brand recalls among women’s wear. It also offers a diverse product portfolio at different price ranges. Its portfolio includes kids’ wear, ready-to-stitch wear, accessories and bottom wear.
To meet the needs of its growing customer base, the company has diversified its product mix to categories like footwear, fragrances and wallets. Furthermore, consumers across India can buy BIBA products through brand outlets and its online portal.
As of December 2021, BIBA had 308 BIBA-brand outlets and 119 Rangriti outlets across 27 states and 160 Union Territories in India. The company also sells its products through third-party e-commerce websites like Myntra, Amazon, Nykaa, Tata Cliq and Flipkart.
Talking numerically, according to the company’s DRHP, the total income of BIBA witnessed a downtrend in FY 2021 with Rs. 5,691.79 million from Rs. 7,357.37 million in FY 2019.
IPO Details and Objectives
BIBA Fashion Ltd. submitted its draft documents supporting its plan for an IPO to SEBI in April 2022. However, later in August 2022, SEBI issued an order of abeyance to this proposal without disclosing the reason. Currently, the company is awaiting to receive a green signal from SEBI to go ahead with its plan.
In its DRHP, the company has proposed to utilise the funds it earns from its upcoming IPO to repay or prepay certain corporate debts. According to its DRHP, BIBA Fashion plans to use approximately Rs. 700 crore for this purpose. The company will use the remaining amount to fulfil general corporate obligations.
BIBA Fashion Limited IPO Details
BIBA Fashion Ltd. is planning to offer equity shares worth Rs. 900 million via a fresh issue. It also proposes to offer 2,77,62,010 equity shares as an Offer for Sale. The total size of the fresh issue and valuation of OFS shares are yet to be declared by this company.
The face value of each equity share of BIBA Fashion Limited IPO is Rs. 10. The company is yet to announce other details regarding BIBA Fashion Limited’s IPO. This information includes the price band of the shares, opening and closing dates and minimum lot size.
Also Read: What are types of IPO?
Strengths
Before investing in an IPO, you must analyse the company’s strengths thoroughly. This gives you a clear picture of the company and its future potential.
The points below highlight the strengths of BIBA Fashion Limited to check before investing:
- BIBA Fashion has strong brand equity across diverse customer segments and holds a leading market position across the nation.
- Capital-efficient and scalable retail models allow the brand to grow as per industry standards. The business model has allowed BIBA to accept the rapid shift of consumer behaviour from offline buying to online purchases in recent years.
- The company is managed by a professional and founder-driven team with good industry experience and track record.
- BIBA Fashion Ltd hosts a strong and well-knit pan-India distribution network with both offline and online channels.
- It is equipped with robust in-house design and tech-first supply facilities to deliver all of its customers premium quality products.
Risks Involved
Besides the above strengths, you must consider looking out for the risks associated with BIBA Fashion Limited’s business. These factors can hinder the company’s operation and its reputation.
The notable risks involved with BIBA Fashion Limited’s IPO are:
- BIBA Fashion Limited’s business relies highly on women’s Indian wear clothing. Any changes in consumers’ buying preferences and shifts in trends can affect its business and operations.
- The business prospects of BIBA Fashion Limited rely on the performance of its key brands. Failure of these brands to grow or maintain sufficient sales can hamper the cash flow and business of the parent company.
- Any worldwide crisis or a future pandemic scenario like COVID-19 can adversely affect the company’s results of operation, cash flows, financial conditions and business. It’s not possible for the company to stay prepared for such situations.
Conclusion
Once SEBI approves this IPO, BIBA Fashion will likely announce its launch date. Consider keeping an eye out for the tentative timeline, price bands and other details of the BIBA Fashion Limited IPO that could be announced soon. This will help you make a thorough and well-informed investment plan that aligns with your goals.
You can explore our website to learn how to invest in BIBA Fashion Limited IPO. Furthermore, you can also open a Demat and trading account with us and start earning as you invest in an IPO.
Also Read: How is an IPO valued?
BIBA Fashion Limited IPO FAQs
The face value of equity shares of the upcoming BIBA Fashion Limited IPO is Rs. 10.
BIBA Fashion Limited was started by Mrs. Meera Bindra in the year 1988.
Meena Bindra, Faering Capital India Evolving Fund and Highdell Investment Limited are the promoters of BIBA Fashion Limited IPO.
JM Financial, Ambit Private Limited, Equirus Capital Private Limited, DAM Capital Advisors Limited and HSBC Securities and Capital Market are the Book Running Lead Managers of BIBA Fashion Limited IPO.
