Beauty and wellness firm VLCC Health Care has refiled Draft Red Herring Prospectus with the capital markets regulator SEBI on August 13 to raise funds via an initial public offering (IPO).
Earlier, the company had withdrawn its IPO in 2016 due to demonetisation. As per The Times of India, it again cancelled IPO plans in 2019 due to the Lok Sabha elections.
The initial public offering comprises a fresh issue of Rs 300 crore by the company and an offer for sale of 89,22,672 equity shares by promoter and investors.
Promoter Mukesh Luthra is going to offload 18,83,414 equity shares, while investors OIH Mauritius and Leon International will look to exit the company by selling their entire shareholding of 18,97,540 (5.04 percent of pre-offer paid-up equity) and 51,41,718 equity shares (13.65 percent of pre-offer paid-up equity).
The company and selling shareholders, in consultation with merchant bankers, may consider a private placement of Rs 100 crore, and if the said pre-IPO placement will be undertaken prior to the filing of RHP with ROC, the fresh issue size will be reduced.
VLCC is going to utilise the net proceeds from the fresh issue for setting up VLCC Wellness Clinics in India and GCC Region, and VLCC Institutes in India. It will also deploy capital to refurbish certain existing VLCC Wellness Clinics in India and GCC Region, repay debts, invest in brand development, invest in digital and information technology infrastructure, and general corporate purposes.
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Promoters - Vandana Luthra and Mukesh Luthra - together hold a 68.72 percent stake in the company. Along with the promoter group, their total shareholding comes to 82.38 percent.
Founded by Vandana Luthra as a beauty and weight management services centre in 1989, VLCC Health Care was incorporated in 1996 and have been building a strategic integrated business model on three core businesses - VLCC branded Wellness & Beauty clinics. VLCC branded personal care products, and VLCC branded institutes for skill development in beauty and nutrition.
It is one of the largest players in the wellness & beauty services industry in India, with the widest footprint of company-operated clinics, serving customers across 310 locations in 143 cities and across 12 countries in South Asia, South East Asia, the Gulf Cooperation Council Region (GCC Region) and East Africa, as of March 2021.
The Indian wellness & beauty industry is forecasted to grow at a CAGR of 10-12 percent in the next five years and is expected to reach $40-42 billion by FY25.
The industry is experiencing a rapid shift from unorganised to organised. The organised sector is expected to grow its market share to around 30-35 percent in FY25 from about 25-30 percent in FY20.
The company's focus on the delivery of service and customer engagement during the Covid-19 pandemic has helped it improve sales from repeat customers, which grew from 50.6 percent in FY20 to 60.5 percent in FY21 for Wellness Clinics in India. As a result, they reported a profit of Rs 6.24 crore on revenue of Rs 532.92 crore in the financial year ended March 2021.
However, it had reported a loss of Rs 15.31 crore on revenue of Rs 769.57 crore in FY20 against a loss of Rs 52.7 crore on revenue of Rs 852.43 crore in FY19.
ICICI Securities, DAM Capital Advisors, IIFL Securities are the book running lead managers to the public issue.