VLCC IPO - Beauty and fitness chain VLCC files DRHP with SEBI

VLCC Health Care filed with SEBI for a proposed IPO to raise funds through a combination of fresh issue and an offer for sale. VLCC is one of the most respected beauty and wellness names and was promoted by Vandana Luthra and Pramod Luthra in 1996. As of Mar-21, VLCC has a footprint in 310 locations across 143 cities which includes branches in South East Asia and the GCC countries.

As per the DRHP filed with SEBI, the public issue will consist of a fresh issue of Rs.300 crore and an offer for sale of 89.23 lakh shares. The selling  shareholders in the OFS will include Pramod Luthra (18.83 lakh shares), OIH Mauritius (18.98 lakh shares) and Leon International (51.42 lakh shares). OIH Mauritius and Leon International will fully exit their holdings.

The proceeds of Rs.300 crore will be utilized to expand VLCC’s presence across India as well as in GCC region. In addition, funds will be deployed to refurbish existing centres, repay high cost debt as well as to invest in building its brand as well as in other digital initiatives to boost growth.

The wellness and beauty industry in India is expected to grow at a CAGR of 12% annualized and is currently pegged at $42 billion. There is a rapid shift to the organized sector. For fiscal year ended Mar-21, VLCC reported net profits of Rs.6.24 crore on revenues of Rs.540 crore. The big takeaway has been the sharp growth in the traction of repeat customers.

Interestingly, VLCC had shelved its IPO plans twice in the past. In 2016, VLCC shelved its IPO plans due to demonetization. Later in 2019, it again abandoned its IPO plans due to the central elections. It hopes to make a success of the IPO this time around.

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