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Private Equity (PE) funds are eyeing a slew of similar ventures with retail czar Kishore Biyani earning a 22-fold return on his investments in ethnic apparel major Biba.

“PE funds are enthused after witnessing the kind of money Kishore Biyani made after exiting Biba. Ethnicwear is an established and promising category that is steadily moving towards branded products, and PE firms are seeking opportunities in this category,” Mr. Siddharath Bindra, MD, Biba Apparels said.

With a sales turnover of Rs. 300 crore, the 25-year-old Biba brand was relatively unknown in 2007 when the Kishore Biyani-promoted Future Ventures picked up a 25.8 per cent stake in it. “In 2007, it was the first PE deal to happen in the ethnicwear category. But now, a lot of smaller deals by a host of local companies are taking place,” Mr. Bindra said.

Apart from Biba, the other big deals in the ethnicwear category include Fabindia (with L Capital and Premji Invest), TNCS Clothing (with Matrix) and Global Desi (with General Atlantic).

Biba is utilising the Rs. 300 crore infused by its new PE partners, Warburg Pincus and Faering Capital, to tap those at the bottom of the pyramid, with its new brand, Rangriti.

Another ethnicwear brand, Seven East, floated by Sanjay Bindra, a former promoter of Biba, is also hoping to attract PE funds if required.

The valuations in ethnicwear have gone up since the Biba deal. It raised the benchmark for the category. The company is planning to build a global brand through e-commerce sites.

According to retail consultancy firm Wazir Advisors, the ethnicwear market in India is expected to grow at 12 per cent, and be worth Rs. 5-lakh crore by 2018 from Rs. 2.5-lakh crore now.


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