KNOW THE COMPANY:
Veranda Learning solutions Limited is a company that specializes in providing a diversified and wide range of solutions in the environment of Integrated and Online learning solutions. The company also carries out learning solutions in offline hybrid and various offline blended solutions. Let’s delve deep into understanding some key elements about the Verdana Learnings IPO.
Veranda Learning solutions Limited is a platform where the students, professionals, aspirants, graduates and other corporate employees of the company participate in their in house designed courses. These courses benefit them in a wide variety through the facility of career-defining professional courses, competitive tests and an exam-oriented course that helps them upskill and reskill their courses.
The company is well known for providing a very lucid and well-defined course on a short- and long-term basis in UPSC Exams and Other competitive exams. In addition, the company also holds courses to develop the corporate personnel to enhance their B2B solutions. As of now, the company has a base of 42,667 Students and professionals. Of these, all 16,793 have been enrolled for the offline mode of classroom teaching and setup, while the remaining 25,874 have been enrolled in the online model.
OBJECTS OF THE VERDANA LEARNINGS IPO ISSUE:
- Prepayment of all the company’s loans, which be availed on a consolidated basis.
- To meet corporate targets.
- To fund the working capital requirement.
- The company also intends to fund various investments and strategic acquisitions.
BASIS OF THE OFFER:
The company in their RHP mentioned that the basis of their IPO offer is as follows:
- Veranda Learning has a robust Promoter base.
- The company have a 360-degree strategy for education and a teaching-oriented goal and approach.
- The company offers a wide range of courses and diversification in the content and payment option.
- Veranda Learning has highly qualified human capital and resources at its disposal with vast experience in the education industry.
- The company holds a compelling brand identity in the sector.
- Veranda Learning has carried out many strategic acquisitions and expansions in its business, leading to the establishment of a successful domain.
- The company uses a highly resource optimized based management system, a highly effective and cost-effective system with fulfilled requirements.
- The company works on a technology-driven, asset-light and very scalable model.
- Veranda Learning is a business that is unaffected by the effect of the Pandemic.
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VERANDA LEARNINGS IPO DETAILS:
Veranda Learning Solution Limited, a company engaged in the business of education with its headquarters in Chennai, recently got approval from SEBI to launch its IPO in the market. The company initially submitted their DRHP with the SEBI. As a result, veranda Learning Solution Limited will launch their Rs. Two hundred crores IPO where the IPO will be a purely new issue-based IPO of Rs. 200 crores. The company also said it would carry out a Pre- IPO placement offer of Rs. Fifty crores are inclusive of the IPO offer amount.
The company stated that the company would use the proceeds of the funds raised via IPO to repay its outstanding dues and debts along with the acquisition of Edureka.
| IPO Opening Date | 29 March, 2022 |
| IPO Closing Date | 31 March, 2022 |
| Issue Type | Book Building Type |
| Face Value | Rs. 10 per equity share |
| IPO Price | Rs. 130 – Rs. 137 per equity share |
| Market Lot | One lot of 100 equity shares |
| Minimum Quantity | 100 equity shares |
| Minimum Amount | Rs. 13,700 |
| Maximum Quantity | 1400 equity shares |
| Maximum Amount | Rs. 191,800 |
| Listing At | BSE, NSE |
| Issue Size | Rs. 200 crores |
| Fresh Issue | Rs. 200 Crores |
| Offer for Sale | – |
| Basis of Allotment Date | 05 April 2022 |
| Initiation of Refunds | 06 April 2022 |
| Credit of Shares to Demat Account | 06 April 2022 |
| IPO Listing Date | 07 April 2022 |
| Basis Of Allotment Type | % Of the allotment from the IPO Offer |
| Qualified Institutional Buyer | 75 |
| Non – Institutional Investor | 15 |
| Retail | 10 |
WEAKNESS AND THREATS OF VERDANA LEARNINGS IPO:
- Veranda Learning has carried out many strategic alliances and investments in acquisitions for its growth plan. Though positive, these investments haven’t been very fruitful until now as the company is still a loss-making company.
- The company has a very high dependence on the exam-oriented courses supplied by their arm, Veranda Race. It also holds IT-related professional courses under Edureka; together, these two courses account for a very high amount of its operating revenue.
- Veranda Learning has a very heavy dependence on its mentors for the growth of the business and better operational results.
- Veranda Learning solutions Limited has an absence of IP Rights as it has the company’s intellectual property. Due to the company’s insufficient capacity and capital structure, it may not be able to safeguard its rights to intellectual property.
- The promoters, the management, director, board, and the company itself, have been subject to the trial under a legal proceeding.
- The company is at a high risk of issuing the Non-Convertible Debenture.
- Veranda Learning solutions Limited has also been susceptible to the risk of Cyber-Security; as a result, it needs to focus highly on establishing cyber security, a Database Management system and a protected environment.
- The company needs to visualize that some of its new strategies and efforts should function efficiently to promote the company upfront on operational and financial parameters.
- Veranda Learning has been engaged in a very highly competitive business of education and coaching. It faces very stiff competition from many well organized and unorganized players in the market.
Also Read :
List of Upcoming SME IPO’s in India.
STRENGTHS AND OPPORTUNITIES OF VERDANA LEARNINGS IPO:
- The company works on a highly result and goal-oriented method of providing teaching and course content with a 360-degree approach.
- Veranda has a team of In-House along with Outsourced Mentors. Due to their constant efforts, they have been able to make up for the continuous monitoring aspect of the students and the company’s progress and the students’ performance.
- The company can customize its course content as per the clients’ needs. The company works on a result-oriented objective for achieving better results.
- Veranda Learning offers a comprehensive and diversified course facility through different platforms as ease of the platforms for the aspirants and students.
- The company also benefits from their powerful and pervasive experience in the education sector and the presence of many professionally qualified teachers and mentors that add to its human capital.
- Overall, the company has a substantial presence in competitive exams.
FINANCIAL TRENDS OF VERDANA LEARNINGS IPO:
| Particulars | For the year ending with the amount in crores | ||||
| 30 June, 21 | 31 March, 21 | 31 March, 20 | 31 March, 19 | ||
| Total Assets | 13.50 | 11.52 | 0.001 | 0.05 | |
| Total Revenue | 4.87 | 2.45 | 0.00 | 0.00 | |
| Loss After Tax | 5.15 | 8.28 | 0.20 | 0.10 |
| PARAMETER | MARCH 21 | MARCH 20 | YoY % |
| Earnings Per Share (Rs) | -1.18 | -1960.00 | 99.94 |
| CEPS (Rs) | -0.27 | -490.00 | 99.94 |
| DPS (Rs) | 0.00 | 0.00 | 0.00 |
| Book NAV/Share (Rs) | -0.01 | -2930.00 | 100.00 |
| Tax Rate (%) | 0.10 | 0.00 | 0.00 |
| Core EBITDA Margin (%) | -300.24 | ||
| EBIT Margin (%) | -325.00 | ||
| Pre – Tax Margin (%) | -326.26 | ||
| PAT Margin (%) | -325.94 | ||
| Cash Profit Margin (%) | -300.98 | ||
| ROA (%) | -143.83 | 0.00 | 0.00 |
| ROE (%) | 0.00 | 0.00 | 0.00 |
| ROCE (%) | -278.93 | 0.00 | 0.00 |
| Asset Turnover (x) | 0.44 | 0.00 | 0.00 |
| Sales/Fixed Asset (x) | 0.61 | ||
| Working Capital/Sales (x) | -0.39 | 0.00 | 0.00 |
| Fixed Capital/Sales (x) | 1.65 | ||
| Receivable days | 45.27 | ||
| Inventory Days | 104.18 | ||
| Payable days | 2544.90 | ||
| PER (x) | 0.00 | 0.00 | 0.00 |
| PCE (x) | 0.00 | 0.00 | 0.00 |
| Price/Book (x) | 0.00 | 0.00 | 0.00 |
| EV/Net Sales (x) | 5.00 | ||
| EV/Core EBITDA (x) | -1.67 | -0.59 | -181.82 |
| EV/EBIT (x) | -1.54 | -0.59 | -160.17 |
| EV/CE(x) | 1.10 | 116.00 | -99.05 |
| M Cap / Sales | 0.00 | ||
| Net Sales Growth (%) | |||
| Core EBITDA Growth (%) | -3788.27 | 0.00 | 0.00 |
| EBIT Growth (%) | -4111.73 | 0.00 | 0.00 |
| PAT Growth (%) | -4123.98 | 0.00 | 0.00 |
| EPS Growth (%) | 99.94 | 0.00 | 0.00 |
| Total Debt/Equity (x) | -99.32 | -0.40 | -24987.80 |
| Current Ratio (x) | 0.44 | 0.00 | 12810.92 |
| Quick Ratio (x) | 0.38 | 0.00 | 10963.23 |
| Interest Cover (x) | -257.97 |
VALUATIONS:
The company in its DRHP mentioned that it has no such listed peers in the country. On the current valuations, the company is currently tailing at the valuations of
Price to Sales (P/S) ratio = 24.5x
The IPO has been raised at this valuation, making the issue an overpriced bid considering that the company is still a loss-making company.
Also, the company has another threat of a very high number of pledged equity shares of the company by the promoter itself. Their weak financials and operating performance also boost their valuations been to slightly overpriced aspects.
PROMOTER HOLDING:
The promoters of the company are as follows:
- Mr. Kalpathi S. Aghoram
- Mr. Kalpathi S. Ganesh
- Mr. Kalpathi S. Suresh
| Pre-Issue Share Holding | 89.22% |
| Post Issue Share Holding | 65.87% |
CONTACT DETAILS:
Veranda Learning Solutions Limited
Old No 54, New No 34,
Thirumalai Pillai Road,
T. Nagar, Chennai – 600017,
Tamil Nadu, India
Tel: +91 44 4296 7777
E-mail: anantharamakrishnan.m@verandalearning.com
Website: www.verandalearning.com
REGISTRAR OF VERDANA LEARNINGS IPO:
KFin Technologies Private Limited
Selenium Tower-B, Plot 31 & 32,
Gachibowli, Financial District,
Nanakramguda, Serilingampally,
Hyderabad – 500 032, Telangana, India
Tel: +91 22 4918 6200
E-mail: capitalsfb.ipo@linkintime.co.in
Website: www.linkintime.co.in
LEAD MANAGER(S)
- Systematix Corporate Services Limited
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