Veranda Learning Solutions Ltd IPO - 7 things to know

Veranda Learning Solutions Ltd, a 360-degree education platform, had filed its draft red herring prospectus (DRHP) in September 2021 and SEBI has already given its observations and approval for the IPO in November 2021.

Normally, the IPOs are approved by SEBI within a period of 2 to 3 months unless there are other queries or clarifications that the regulator seeks.

The IPO of Veranda Learning Solutions Ltd will be entirely a fresh issue of equity with no offer for sale component in the IPO.
 

7 interesting facts to know about the Veranda Learning Solutions Ltd IPO

1) Veranda Learning Solutions Ltd has filed for an IPO with SEBI and also got the SEBI approval to go ahead with the IPO. The Veranda Learning Solutions Ltd IPO comprises of a fresh issue of Rs.200 crore and there is no offer for sale component for the issue.

However, since the price band for the granular details like the number of shares offered and the precise size of the issue are not yet known. The company has only provided an overall issue size in the draft red herring prospectus (DRHP) filed with SEBI.

2) There is no offer for sale component and since there is no OFS component, there would no selling of shares by the promoters or early shareholders as part of this issue. The OFS component does not result in any fresh fund infusion or dilution of the capital or the EPS.

However, the selling of stake by the promoter normally tends to increase the free float of the company and facilitate listing of the stock. However, in the case of Veranda Learning Solutions, there is no OFS planned.

3) The fresh issue portion of Rs.200 crore will be the overall issue amount and the actual size of the offer and the pricing are yet to be finalized. Veranda Learning Solutions plans to use the proceeds from the fresh issue for repayment and possible prepayment of loans taken by the company over the course of business.

This will be largely used to retire the acquisition consideration of Edureka, which it had acquired recently. The company also plans to partially allocate funds for organic and inorganic growth initiatives. The fresh issue will reduce the promoter stake by increasing the overall outstanding equity size.
 

4) Out of the total issue size of Rs.200 crore, the company plans to issue shares to the tune of about Rs.50 crore by way of pre IPO placement off shares. This would be largely done through private placement of shares or by rights to the existing shareholders.

These shares could be placed either with HNIs, family offices or with qualified institutional buyers or QIBs. Unlike the anchor placement, the pre-IPO placement offers a much better opportunity for pricing freedom, although the lock-in period is longer.

5) Veranda has positioned its business model as a comprehensive 360-degree online education platform. Currently, Veranda Learning Solutions offers diversified and integrated learning solutions.

Such content is disbursed to the potential learners in online, offline hybrid, and offline blended formats. It has a wide audience comprising of students, aspirants and graduate professionals, apart from corporate employees who are also looking to constantly enhance their learning quotient.

6) One of the major purposes of the public issue is to defray the consideration it has paid for Edureka. The deal had been consummated in the month of September 2021. Veranda had acquired Edureka, which is a live-instructor-led online solutions provider and largely caters to the information technology or the IT industry.

The consideration paid for Edureka was Rs.245 crore. Prior to the Edureka deal, Veranda had also acquired Chennai Race Coaching Institute. This is a professional and specialized coaching institute that largely focusses on Banking, SSC and PSC exams.

7) The IPO of Veranda Learning Solutions Ltd will be lead managed by Systematic Corporate Services Ltd. They will act as the sole book running lead managers or BRLMs to the issue. The issue of Veranda Learning Solutions will be listed on the BSE and also on the NSE.

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