Yash Birla Group’s natural healthcare products firm Birla Research Lifesciences, backed by ad-for-equity media investor Bennett, Coleman & Co. Ltd (BCCL) is looking to raise Rs 75 crore through a public issue. Another group firm Birla Pacific Medspa, which is into healthcare services and also backed by BCCL, just went public a couple of months ago.
Birla Research Lifesciences is in the business of ayurvedic medicines with focus on natural healthcare, personal hair & skin care products and diet foods & supplements. These products are marketed under the brand names of Birla Veda, Chant and Nutrinext, respectively. The three-year-old firm markets the products through its chain of Rebirth Stores and also through retail chemists and stockists.
The company plans to use the proceeds from the IPO for setting up a manufacturing facility (Rs 19.93 crore), ensuring capex to introduce more Rebirth Stores (Rs 6 crore), installing R&D facilities (Rs 5.26 crore), brand promotion (Rs 10 crore) and meeting working capital requirements (Rs 15 crore), besides other purposes.
For the year ended March 31, 2011, the firm had a total income of Rs 46.79 crore largely through traded products, as compared to total revenues of Rs 91 lakh in FY 2010. The firm recorded a net loss of Rs 6.6 crore last year that rose over 50 per cent from Rs 4.18 crore for the year ended March 31, 2010.
BCCL picked 29.3 per cent stake in Birla Research Lifesciences last week in a pre-IPO deal estimated at Rs 17.5 crore ($3.6 million). The shares were subscribed at par value of Rs 10 each.
If this is also going to be the public issue price, Birla Research Lifesciences will see an equity dilution to the tune of 55 per cent, valuing the firm at Rs 134.7 crore ($28 million). BCCL’s stake will then shrink to around 13 per cent.
The group is arguably eyeing an aggressive valuation for its three-year-old firm, buoyed by the positive response to its other group firm Birla Pacific Medspa that has seen its share price more than double post-listing. Birla Pacific Medspa, which had revenues of Rs 2.2 crore with net loss of Rs 4.43 crore for the year ended March 31, 2011, currently commands a market cap of Rs 257 crore.
Birla Pacific Medspa, which raised Rs 65 crore in its maiden public issue in June this year, is engaged in the business of beauty and healthcare treatment, and operates health and fitness centres under the brand name Evolve. It currently runs five centres in Mumbai and two more on franchise basis at Thane and Chennai.
Originally, the Yash Birla Group had entered into an equal-equity JV with Pacific Healthcare Holdings (one of East Asia’s leading healthcare providers with facilities in Singapore, Hong Kong and China) and Dr Desai, to form Birla Pacific Medspa Pvt Ltd. However, the JV came unstuck early this year after the foreign partner’s stake got diluted.
Also, last month, Bollywood veteran Amitabh Bachchan bought around 1 per cent in Birla Pacific Medspa through an open market transaction.
See Our Earlier Reports:
Big B Picking Minority Stakes In Small Cap Firms
Birla Pacific Medspa Sets IPO Price Band At Par