Why Subscribe to BIBA Fashion IPO
BIBA Fashion Ltd. is one of the largest lifestyle
brands in the women’s Indian wear market in India in terms of market
share. Launched in 1986, the company’s flagship brand, BIBA, is a
‘category creator’ in the women’s Indian wear segment benefiting
from a rich legacy, leading market position across the category and
an industry leading online presence. The company develop, design,
source, market and sell a wide portfolio of Indian wear for women and
girls across multiple brands, namely its flagship brand, BIBA, and its
value fashion brand, Rangriti. It’s products are specifically tailored for
the Indian consumer and according to the Technopak Report, the
company’s range of products offer distinct price points for its consumers. Furthermore, its flagship brand, BIBA, has the highest online
brand recall amongst Indian wear brands, as of February 2022. Its
brands are designed to cater to almost all of a woman’s Indian wear
needs, ranging from casual wear, occasion wear to office wear and
consequently, its products cater to a broad range of Indian wear consumers in India. The company offers its customers well-designed and
high-quality products across segments and has one of the widest
portfolios of products amongst women’s apparel brands in India in
terms of SKUs. Its range of products across the women’s Indian wear
market include salwar kameez dupattas, Mix-n-Match wear, Ready-to-Stitch wear, kids wear, bottom-wear and accessories.
Objects of the Offer :
The Offer comprises of a Fresh Issue
aggregating up to ₹900 million. Out of the net proceeds from the fresh
issue, ₹700 million would be utilized for Repayment or pre-payment of
certain borrowings availed by the Company. and the balance would
be used for general corporate purposes. The offer also comprises of
offer for sale of up to 2,77,62,010 shares.
BIBA Fashion Industries IPO Analysis
Consistent track record of financial performance:
The company’s revenue from operations has
decreased from ₹7,291.31 million in FY19 to ₹5,257.38 million in
FY21. The company’s EBITDA decreased from ₹1,297.07 million in
FY19 to ₹ 623.11 million in FY21 while PAT decreased from ₹202.43
million in FY19 to ₹(118.40) million in FY21.
Consolidated Financial Summary Of BIBA Fashion
|(`₹ in Millions)
|Revenue from Operations
Leading market position and strong brand equity across a diverse set of consumers across the value chain
BIBA Fashion Ltd is one of the largest lifestyle brands in the women’s Indian wear market in India in
terms of market share, as of financial year 2020. Its flagship brand BIBA was amongst the first national brands in the Indian wear segment and has a rich legacy with a large online presence. The
brand BIBA has the highest brand recall amongst women’s Indian wear brands online, as of February
2022, which it believes reflects the strength of its brand and has contributed to the growth of its
business. As a ‘category creator’ for Indian wear in the women’s Indian wear segment, the company
has a strong growth profile and benefit from market movements towards organized retail, large ecommerce growth trends in India and positive demographic shifts, including being one of the youngest populations globally compared to other leading economies, increasing urbanization, an increase
in the number of working women and the rising spending power of middle-class consumers. The
strength of its brand has enabled the company to expand into adjacent categories, including jewellery, footwear, wallets and fragrances, with scope for further expansion. It believes this creates high
growth potential over an extended time horizon.
Diversified pan-India multichannel distribution with a strong foothold on both offline and online channels
BIBA Fashion Ltd’s brands has a pan-India presence with a multichannel distribution network of 427
EBOs (comprising 308 BIBA-branded outlets and 119 Rangriti-branded outlets) across 27 states and
160 cities in India, 930 LFSs across 29 states and 267 cities in India and 30 MBOs. As of December
31, 2021, 61% of its EBOs are on the Indian high street, 38% of its EBOs are located in malls, and 1%
are in airports, with 82% of its EBOs owned by the company and 18% by franchisees. It has significantly expanded its EBO footprint by a net addition of 133 stores since April 2018, including limited
store closures during the COVID-19 pandemic. In the period from 2018 to 2022, its EBO rollout
CAGRs of 6% and 27% for its BIBA- and Rangriti-branded EBOs, respectively, is the highest compared
to its peers, and its total number of EBOs is amongst the highest in the women’s Indian wear segment. Its key LFS accounts comprise retail stores such as Shoppers Stop, Lifestyle, Central and
Pantaloons. For financial year 2021, 37.04% of its revenue from operations was generated from
online channels, of which 11.55% was from its own website, BIBA.in, and 25.49% from third-party
online marketplaces such as Myntra, Amazon, Flipkart, Nykaa and Tata Cliq.
Significant investments made in digital capabilities with a strong focus on technological efficiencies
A ‘digital first’ approach is an increasingly critical driver of growth across many consumer categories
in India, as well as globally, with millennial and generation Z demographic segments now entering
the workforce and driving digitization as active adopters of technology and digital media. This enables the company to continue growing at scale. Consequently, it believes it is well placed to take
advantage of further digital growth. It launched its first online platform, BIBA.in, and later followed
by Rangriti.com, and invested in building a strong e-commerce team. It has also made significant
digital marketing investments through Google and other social media platforms in the past five years.
For the financial year 2021, approximately 37.04% of its revenue from operations was generated
through online channels, which is superior to its peers in the women’s Indian wear segment. It develops a strong understanding of fashion trends and engage in ongoing and deep conversations
with its target customer group, which enables the company to obtain insight into the tastes and
preferences of its consumers. This is further strengthened by significant online data, reviews and
ratings which provide the company with a quick feedback loop, ensuring that it can quickly identify
market trends and white spaces. Its digital marketing strategy creates high consumer engagement
and demand for its products. It produces innovative marketing campaigns, collaborate with leading
influencers and celebrities and create special online product launches.
Strong in-house design and tech-first supply chain capabilities to deliver innovative and high-quality products
BIBA Fashion Ltd has a strong product proposition and believe that its products are well-designed
and of high quality. As of December 31, 2021, it has an in-house design team of 36 people, which
has created over 1,200 designs registered with the Controller General of Patents, Designs and Trademarks in India. It designs and release products for each of the two principal fashion seasons every
year – one for spring / summer and another for autumn / winter. Given its large supplier and vendor
network across the North India region, it can create products in a timely manner and with consistently high quality. As of December 31, 2021, it had a network of 251 fabric suppliers and 114 factories (comprising 67 stitchers and 47 contract factories for dying and printing). It has a diverse vendor
base for its products. Geographically, it purchases textiles from all textile-producing hubs in India,
including Delhi/NCR, Surat, Banaras and Ludhiana. It’s after-sales proposition offers customers an
easy return and/or exchange process and it has made efforts to improve its working capital cycle to
facilitate this benefit. In 2018, it implemented QlikView, a business intelligence tool, for data analytics and management reporting. It has also implemented artificial intelligence and machine learningbased software for merchandising, assortment planning, distribution and replenishment across its
EBO stores. These system-driven processes and strong analytical capabilities enable the company
to make data-based decision-making and forecast cultural and evolving fashion trends across India.
Capital-efficient and scalable retail model to capitalize on the strong industry growth profile
BIBA Fashion Ltd operates a capital-efficient and scalable retail model to capitalize on strong industry growth in the women’s Indian wear market in India. In financial years 2019, 2020 and 2021 and
the nine months ended December 31, 2021, it had a net addition of 37, 49, 17 and 30 stores, respectively, for its BIBA and Rangriti brands. It also had limited store closures as a result of the COVID-19
pandemic during this period. According to the Technopak Report, the apparel market in India was
estimated at US$ 60 billion, in terms of consumer retail spending, as of financial year 2020, and is
one of the larger segments of the Indian retail sector. Higher brand consciousness, increasing digitization, greater purchasing power and increasing urbanization are expected to further drive growth
in this market. Historically, consumption of women’s apparel was centered around the informal market through standalone boutiques selling unbranded wares and the sale of unstitched fabrics, allowing women to use tailors to create their desired garments through made-to-measure services. However, as consumers seek better quality and a better overall shopping experience, with the emergence
of aspirational brands with unique, differentiated offerings, increased trust in safety and pricing, the
market is shifting rapidly towards branded and organized offerings. As one of the leaders in this
fast-growing industry, it believes it is well-positioned to capitalize on this shift.
Its majority of the manufacturers are exclusively based in a single geographical region. Any adverse
development affecting such region may has an adverse effect on its business.
If it is unable to accurately identify customer demand and maintain an optimal level of inventory in its
stores, the business, results of operations and cash flows may be adversely affected.
Its growth and profitability depend on the level of consumer confidence and spending in India and the
overseas jurisdictions in which it operates.
The Continued momentum in EBO roll-out to expand retail network in Tier 2, Tier 3 and Tier 4 cities
and leverage its substantial past efforts and experience will help extend its reach and open newer
The company intends to expand its existing category and launch additional products for women’s
wardrobe requirements with the aim of widening its audience and capitalize on its pan-India distribution network.
Capitalize on the increasing e-commerce penetration in Indian retail as well as within its category.
The company’s business depends on the timely and continual purchases of and payments for the
products by the franchisee and retailing customers, both in the short and long term. Their delay or
failure to do so may adversely impact the business.
Pricing pressure from the competitors may affect the ability to maintain or increase the product
prices and, in turn, revenue from product sales, gross margin and profitability, which may materially
and adversely affect the business
Operations could be adversely affected by labour shortages, strikes, work stoppages or increased
wage demands by its employees or any other kind of disputes with its employees.
he industry is competitive in both the offline and the rapidly-growing online channels have the potential to adversely affect its pricing ability and disrupt its sales.
Strategies going forward:
Sustain the leading position of its flagship brand BIBA
BIBA Fashion intends to continue to leverage its in-depth market research, robust technology plat-form and data analytics by introducing a wide range of products within the Indian wear market and
consolidating its leading position. Its independent growth strategies for its brands and product
ranges are set out below:
BIBA: It aims to continue and sustain its leadership within casual, office and occasion wear. The
Indian formal wear market, however, represents a large opportunity for the company where there
is a lack of a nation-wide brand in the mid-premium to premium segment. It will expand its offering
in high demand markets and use cross-selling efforts at existing BIBA stores to drive demand for
its formal range. To enhance and diversify its product range, it aims to cater to an even larger
proportion of Indian women’s wardrobe requirements.
Rangriti: As its value fashion brand, it aims to increase its footprint with a targeted presence of
EBOs in Tier II and Tier III cities. It aims to continue and expand its sales through the online channel (including its brand website and online marketplaces) and target new customers through attractive designs, strong marketing efforts and pricing initiatives.
BIBA Girls: A key factor driving the Indian kids apparel market is India’s young population with
over 361 million individuals below the age of 15 as of financial year 2020. The Indian kidswear
apparel market is highly organized with organized players representing 19.4% of the Indian apparel market and the share of the organized market is expected to increase from 19.4% in financial year 2020 to 27.1% by financial year 2025. It has a first-mover advantage in this market and
has already made progress through its brand BIBA Girls and aim to leverage its strong design
capabilities and the brand equity of its flagship BIBA brand to become a leading player in this
Spelle: a key focus for its company is its expansion into adjacent categories. It intends to offer a
‘complete look’ for its customers across categories, including across beauty and fragrances. It
aims to continue to develop its beauty brand through its product offering in its EBOs, as well as
launch its brand on its own website, BIBA.in and online marketplaces.
Capitalize on the increasing e-commerce penetration in Indian retail as well as within its category
BIBA Fashion Ltd has made significant investments in its IT infrastructure and digital capabilities
since 2014 and has enjoyed an industry-leading online presence even prior to 2019 and the shift to
online shopping as a result of the outbreak of the pandemic. Partly as a result of these investments,
its revenue from operations remained resilient during the pandemic. Its flagship brand BIBA is a
renowned brand digitally with a strong follower base on social media channels and it has one of the
highest number of followers on Instagram amongst Indian wear brands in India. Its online e-commerce platforms include BIBA.in and Rangriti.com, and in Financial Year 2021, it generated 37.04%
of its revenue from operations from online channels, which is the highest amongst its peers. As of
February 2022, its BIBA.in website was the number one ranked brand website in terms of consumer
purchases in the women’s Indian wear segment. According to the Technopak Report, in January
2022, its websites, BIBA.in and rangriti.com collectively generated approximately 920,000 visits
across 507,000 unique visitors, and it has the highest website ranking amongst peers in the fashion
and lifestyle category. It intends to capitalize on this position by further increasing sales through its
websites and online marketplaces.
Continue momentum in EBO roll-out to expand retail network
As part of its growth strategy, BIBA Fashion Ltd intends to continue to expand its presence by setting
up new EBOs and expand its EBO network in additional regions across India. Distributive growth
across India is resulting in the growth of demand from Tier II, Tier III and Tier IV cities which together
accounted for 34% of the demand in the apparel market in financial year 2020 and is further expected
to grow further in the coming years. Having established EBOs primarily in Tier I cities in India, the
company intends to expand its focus and establish additional EBOs on the basis of a similar model,
across Tier II, Tier III and Tier IV cities in India. It intends to leverage its substantial past efforts and
experience, to expand its presence across several markets in India which it has identified as having
potential for opening further EBOs. It expects to leverage its existing extensive store network and its
knowledge of various different markets in India to tap this growth opportunity. Its expansion into
newer markets offers the company the potential for market share gains, increased brand recognition
and economies of scale. The company intends to leverage the experience of its operations, existing
store network and resources to tap into this growth opportunity.
Increase the range of its products in adjacent categories to develop the ‘complete look’ strategy of its flagship brand BIBA
BIBA Fashion Ltd intends to develop a ‘complete look’ for its customers and increase the range of
products offered by its brands in adjacent categories, including accessories, such as jewellery, footwear, wallets and fragrances. It intends to continue to develop and launch additional products for
women’s wardrobe requirements with the aim of widening its audience and capitalize on its panIndia distribution network. It assesses consumer demand, international and local fashion trends and
evolving market preferences in order to evaluate the feasibility of new types of product introductions.
Leverage technology to bring cost efficiency and enhance customer experience It aim to improve its
operating efficiency and ensure efficient supply chain management by adopting global best practices. Its investments towards improving its IT infrastructure are aimed towards increasing its
productivity and the efficiency of its resources. The company also intend to manage its operating
costs through leveraging technology as it expects it will not only improve its sales but also ensure
customer satisfaction. The company also proposes to further strengthen its data analytics which
will enable a better understanding of the preferences of its customers, improve sales and help in
scaling its operations.
The content on this page is made available on the basis of the DRHP (draft red herring prospectus ) filed by BIBA Fashion India Limited. The
final content could change based on the Red Herring Prospectus (RHP) filed