Carlyle Group acquires majority stake in VLCC, a beauty and wellness chain which was headed for an IPO

The Carlyle Group, a globally renowned private equity firm, recently acquired the majority of shares in VLCC – an Indian beauty and wellness solutions provider that had previously twice drafted red herring prospectus (DRHP) for an initial public offering (IPO). The most recent DRHP was filed back in August 2021. Despite heading towards a mid-2022 IPO launch, at the last moment VLCC did not proceed with its issue and allowed their DRHP to expire.

The Carlyle Group has elected to not disclose any financial details regarding the acquisition; nevertheless, it revealed that equity for this deal will be sourced from funds managed and supervised by entities affiliated with their Asia Partners. Additionally, as of September 2022, The Carlyle Group had already invested over $5.5 billion in India’s economy!

Amit Jain, managing director and co-head, Carlyle India Advisors said in a statement-

“We plan to help VLCC accelerate growth through investments in brand building; product expansion; scaling its pan-India digital and e-commerce distribution channels; and expanding its local footprint of retail clinics.”

Founded by Vandana Luthra in 1989, VLCC has become a global leader in health and wellness with an impressive footprint of 210 clinics across 118 cities and 11 countries throughout South Asia, Middle East and Africa. Additionally, the brand operates 100 highly-regarded skill development institutes within India providing expert training in beauty and fitness segments.

Founder Vandana Luthra stated-

“We believe VLCC is well-positioned to capture a larger share of the fast-growing skincare, beauty and wellness market in the countries we operate in. We are delighted to have found in Carlyle a partner who shares our vision and plans for taking VLCC to its next level of growth.”

VLCC submitted its Initial Public Offering Documents Twice

According to SEBI, the beauty and wellness chain has been eager to initiate an IPO twice – in 2015, then again 2021.

During a 2022 interview with the Economic Times, VLCC’s Chairman Mukesh Luthra declared that the company had planned to be listed in mid-2022 – however unfortunately it was not able to come into fruition.

At the moment, VLCC had designed an Initial Public Offering (IPO) to accumulate funds of up to ₹850-900 crore. The proceeds would be partially sourced from a fresh issue of equity shares worth ₹300 crore and the rest via an offer for sale by promoter Mukesh Luthra as well as investors OIH Mauritius and Leon International who will fully liquidate their stakes.

The Carlyle Group recently announced that VLCC will welcome Gurveen Singh and J Suresh as their new independent directors. Notably, Suresh had just departed from Arvind Fashions prior to this announcement.

The beauty and wellness chain has stated that the investment from Carlyle Group will be used to further boost their digital presence. Additionally, VLCC had already initiated a plan to open new stores over the next five years as well as increase its online product portfolio.

This move by the Carlyle Group comes in line with the current trend of conglomerates focusing on India’s fast-growing beauty and wellness industry.

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