Birla Pacific Medspa Ltd, a healthcare start-up of the Yash Birla Group, is coming out with its maiden public offering by issuing shares at face value. Birla Pacific Medspa, which is backed by Bennett, Coleman & Co Ltd (BCCL), is looking to raise Rs 65 crore from its issue opening on June 20 and closing on June 23. The price band for the issue has been set at Rs 10-Rs 11 per share (share of face value Rs 10), according to a public disclosure on Wednesday.
Ad-for-equity media investor BCCL, which currently owns 22.81 per cent stake in Birla Pacific, will be underwater in this issue as it has subscribed shares last year at Rs 14 per scrip. BCCL invested through subscription of warrants in March, 2009. The warrants were converted into equity shares in July, 2010, translating into a deal worth Rs 15 crore.
Birla Pacific Medspa’s issue comes after Kishore Biyani’s investment & business management firm Future Ventures also issued shares at par during its IPO earlier this year. Future Ventures share price has not managed to scale above the issue price as investors have concerns over earnings visibility.
The Rs 65 crore issue will give Birla Pacific Medspa a post-money valuation of Rs 117 crore at the upper end of the price band. The shareholding of the promoter group is expected to whittle down to 26-29 per cent from the current 64.77 per cent, after the issue.
Arihant Capital Markets is the book running lead manager to the issue.
Birla Pacific Medspa 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. Around Rs 50 crore from the issue will be used to open 55 Evolve Medspa centres across the country while the rest will be deployed for brand building and working capital requirements, among others.
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. Pacific Healthcare currently holds 7.2 per cent stake in the company. See our earlier story
Birla Pacific Medspa reported a total income of Rs 1.7 crore, with a net loss of Rs 3.77 crore for the nine-month period ending December 31, 2010.
Last month, the Yash Birla Group increased its holding to 99 per cent in ayurvedic spa chain firm Birla Kerala Vaidyashala (BKV). The stake was acquired for an undisclosed amount from the Kurup family who continues to own one per cent in the company. BKV has more than 40 ayurvedic spa centres across key cities in India and specialises in therapeutic massages & treatment for lifestyle diseases.