Mrs. Vandana Luthra first inaugurated VLCC Health Care Limited in 1989. It started its business operation as a company for the beauty care center. Currently, the business operation of the Company caters to around 310 locations in 143 cities. In addition, the Company has an international presence, being spread to 12 countries. The Company started its journey as a service provider and has established itself as a beauty service and product company. In this article, we take a closer look at the VLCC Health Care IPO details and its possible future prospects.
The Company, through its business, has developed an ecosystem of Professional Services and Products in the Beauty, Wellness, and Healthcare sectors. The Company is also engaged in skill development training along with its own built R&D facility. The business operation of the Company can be divided into three major verticals. These are:
- VLCC Wellness & Beauty Clinics
- VLCC branded personal care goods
- VLCC branded institutes for nutrition skill and beauty development
OBJECTS OF THE IPO ISSUE:
- Prepayment of all the loans of the Company, which be availed on a consolidated basis.
- To meet corporate targets.
- To fund the working capital requirement.
BASIS OF THE VLCC HEALTHCARE IPO OFFER:
- The Company has established a top position and a significant brand value in the country’s beauty, cosmetics, and wellness segment.
- The Company has an Integrated and Customized business model. It enables the Company to attain a high amount of potential along with scope and size.
- The Company has the full potential to develop a diversified and as well as unique product portfolio.
- The Company has a well-established and affordable financial framework of the model.
- The Company has an excellent board of directors along with eminent promoters.
VLCC HEALTH CARE IPO:
VLCC health care Limited is a company engaged in the beauty, cosmetics, and wellness sectors. The headquarters of the Company are in Gurgaon. The Company has submitted its DRHP to the SEBI. Now, VLCC is waiting for approval from SEBI to float their IPO in the market. The Company has brought forward the IPO comprises of an issue of fresh equity worth Rs. 300 Crore and an OFS been brought forward by the promoters and other stakeholders of 8,922,672 Equity shares. Check Day by Day IPO Subscription Details (Live Status)
Through the OFS, the selling stakeholders are as follows:
| Promoter of the company Mukesh Luthra | 18.83 lakh equity shares |
| OIH Mauritius Ltd | 18.97 lakh equity shares |
| Leon International | 52.42 lakh equity shares |
The Company also applied and got approval from SEBI to float their IPO in the market in 2016 but decided not to float their IPO due to the Demonetisation by the GoI. Also, in 2019, it canceled the plan again for the IPO due to the Lok Sabha Elections. The Company also mentioned that it might consider a Pre-IPO allotment of Rs.100 Crore inclusive of the IPO offer.
| IPO Opening Date | |
| IPO Closing Date | |
| Issue Type | Book Building Type |
| Face Value | Rs.10/ Equity Share |
| IPO Price | |
| Market Lot | |
| Min Order Quantity | |
| Listing At | BSE, NSE |
| Issue Size | |
| Fresh Issue | Rs. 300 Crore |
| Offer for Sale | 8,922,672 Equity shares |
| Basis of Allotment Date | |
| Initiation of Refunds | |
| The Credit of Shares to Demat Account | |
| IPO Listing Date | |
| Basis of Allotment Type | % Of the Allotment in the IPO Offer |
| Qualified Institutional Buyer | 75 |
| Non-Institutional Investor | 15 |
| Retail | 10 |
FINANCIAL TRENDS OF VLCC HEALTH CARE IPO:
| PARAMETERS | MARCH 21 | MARCH 20 | YoY % |
| Core EBITDA Margin (%) | 22.10 | 18.51 | 19.43 |
| EBIT Margin (%) | 9.57 | 4.93 | 94.25 |
| Pre-Tax Margin (%) | 0.96 | -2.15 | 144.91 |
| PAT Margin (%) | 1.17 | -1.99 | 158.88 |
| Cash Profit Margin (%) | 19.77 | 11.88 | 66.48 |
| ROA (%) | 0.93 | -2.09 | 144.51 |
| ROE (%) | 8.07 | -19.92 | 140.50 |
| ROCE (%) | 23.41 | 16.50 | 41.93 |
| Asset Turnover(x) | 0.79 | 1.05 | -24.40 |
| Sales/Fixed Asset(x) | 0.69 | 0.97 | -29.42 |
| Working Capital/Sales(x) | -2.35 | -2.75 | 14.75 |
| Fixed Capital/Sales(x) | 1.46 | 1.03 | 41.69 |
| Receivable days | 27.94 | 20.27 | 37.86 |
| Inventory Days | 44.77 | 33.09 | 35.29 |
| Payable days | 160.26 | 132.06 | 21.36 |
| Net Sales Growth (%) | -30.75 | -9.72 | -216.36 |
| Core EBITDA Growth (%) | 1.51 | 19.94 | -92.43 |
| EBIT Growth (%) | 34.52 | 0.00 | 0.00 |
| PAT Growth (%) | 140.77 | 70.95 | 98.40 |
| EPS Growth (%) | 140.77 | 70.95 | 98.40 |
| Total Debt/Equity(x) | 1.67 | 1.97 | -15.17 |
| Current Ratio(x) | 0.43 | 0.37 | 17.04 |
| Quick Ratio(x) | 0.29 | 0.20 | 42.58 |
| Interest Cover(x) | 1.11 | 0.70 | 59.73 |
| Particulars | For the year along with the amount in Crore | ||||
| 31-Mar-21 | 31-Mar-20 | 31-Mar-19 | |||
| Total Assets | 692.32 | 751.34 | 812.21 | ||
| Total Revenue | 565.24 | 775.02 | 861.31 | ||
| Profit After Tax | 6.24 | -15.31 | -52.71 |
WEAKNESS AND THREATS OF VLCC HEALTH CARE IPO:
- The COVID-19 has affected the Company significantly.
- The COVID-19 has also changed the consumer pattern along with consumer spending.
- The Company may also be affected by the performance of its franchisees, distributors, and marketers. Any negative strategy by them can affect the well-established and trust associated with the VLCC Brand.
- The Company is engaged in a sector where it faces tremendous competition from many organized and unorganized players.
- The Company is also vulnerable to complaints raised from the customer.
- The Company may also be affected due to its inability to manage its inventory associated with products, inventory shortage, and supply value chain.
- The Company has experienced loss in last few financial years. The DRHP of the Company also stated that they are not sure about their profitability matrix and profitability ratios.
- The Company has some Unfunded contingent liabilities that have been stated in their balance sheet.
- The Company has experienced a weak market scenario. It is due to the reduced consumer spending after and during Covid-19.
- The Liquidity profile and the debt protection metric of the Company are under pressure. It is due to the low liquid investments and cash flows and a very limited buffer of the Company on working capital. It poses up a threat to the revenue of the Company.
- The Company is also vulnerable to any disruption regarding availability, pricing, and supply chain of the raw material for their finished product.
- Another important challenge to the Company is the replica product of their original product in the market. VLCC is a top-notch company in the beauty and cosmetics field; any replica or first copy will downgrade the quality assured by their original product, which will negatively impact their brand image.
- The Company earns a major revenue from Export of their products. As a result, the Company needs to ensure that proper strategies are implemented for their exporting business.
- The promoters, directors, the Company, and its subsidiary are currently under trial for a legal procedure.
STRENGTHS AND GROWTH ASPECTS OF VLCC HEALTH CARE IPO:
- The Company has established itself from a service provider to a well-positioned and established brand with a huge brand awareness due to its proven track record and excellent operational parameters of its product quality.
- The Company focuses on shifting its business outlook to an Omni- Channel Setup, including a focus on Online sales through its App and availability of its products on many online platforms.
- VLCC has shifted its focus for expansion of the brand for a PAN India presence. The brand has strong roots in Tier-1 cities while it is still under a developing phase in Tier-2 and Tier-3 cities of the country.
- The Company also has its training centers where professionals give training for various kinds of services. Thus, it enhances the level of service attained to the customers, increasing their trust in the brand.
- The Company has been awarded many awards in the past. The Company was awarded by “Superbrand Award” in 2017, 2016. It also won the ASSOCHAM 2020 honors in the “Beauty, Wellness & Personal Care Products Category” category. The Company has also won the award for being India’s most trusted brand engaged in Beauty and Wellness Category from 2015-1019.
- The Company provides a diversified service and product portfolio.
- The Company has become a one-stop solution for a variety of services. As a result, it has attained a high client base throughout its business operation.
- The Company will also benefit from the growth of the Indian Beauty and Wellness Industry. The industry is expected to grow with a CAGR of 12 % until FY25. VLCC being one of the market leaders, will be a direct beneficiary of the industry growth.
- The Company also stated that it would carry out various cost-rationalization strategies. It will help the Company to improve its margins upfront on financial and operational parameters.
- The Company has decided to shift to an asset-light model. It will help them expand their salons by the JVP- Joint Venture Partnership mode.
PROMOTERS:
- Mrs. Vandana Luthra
- Mr. Mukesh Luthra
| Pre-Issue Share Holding | 82.38 % |
| Post Issue Share Holding |
CONTACT DETAILS:
VLCC Health Care Limited
M-14 Greater Kailash-II, Commercial Complex,
New Delhi 110 048, India
Tel: +91 11 4163 1975
E-mail: investors@vlccwellness.com
Website: www.vlccwellness.com
REGISTRAR:
Kfin Technologies Private Limited
Selenium, Tower B, Plot No. – 31 and 32,
Financial District Nanakramguda,
Serilingampally, Hyderabad,
Rangareddi 500 032 Telangana, India
Telephone: +91 40 6716 2222
E-mail: vlcchealthcare.ipo@kfintech.com
Website: www.kfintech.com
LEAD MANAGER(S) OF VLCC HEALTH CARE IPO:
- ICICI Securities Limited
- DAM Capital Advisors Limited
- IIFL Securities Limited
