parlaying a Investment of more than 20,000 2,225 crore would be a stupendous achievement in itself. But even that pales in comparison to what could have happened if Vandana Luthra had actually started her business a few decades later, and if she had taken the digital route, instead of doing it the hard way. , building a multinational business empire brick by brick.
Private equity group Carlyle has acquired a major majority stake in wellness, beauty products and beauty services company VLCC Healthcare Ltd. 2,255-2,460 crore ($275-300 million) brings to a close the most significant entrepreneurial journey by Indian women entrepreneurs in recent times.
In fact, when Luthra started her first beauty and wellness center in a south Delhi neighborhood in 1989, the words “woman” and “entrepreneur” were rarely found in public discourse. In pre-reform India, starting a business was not an easy task for anyone, let alone a young woman and mother.
But the Luthras were clearly cut from a different cloth. Born into an upper-middle-class family – his father was an engineer with a German multinational company, while his mother was an Ayurveda doctor – Luthra possessed that elusive but essential quality that all successful entrepreneurs possess – an eye for opportunity.
Accompanying his father on his business trips to Germany and other Europe, he witnessed a flourishing wellness industry in Europe – and the absence of one in his own country. But it wasn’t a spontaneous leap of faith into the unknown, backed only by instinct. She carefully planned for her venture, equipping herself with the skills and knowledge by taking courses in beauty, wellness and nutrition in Europe and the UK.
Meanwhile, life happened in the form of marriage and then motherhood. Nevertheless, the Luthras stuck to their beliefs. And when she wanted to start her own business, she refused financial help from husband Mukesh, who came from a business family, and instead, persuaded a bank to lend her the start-up money.
The first ‘Vandana Luthra Curls & Curves’ center was opened in 1989, offering something that contemporary ‘beauty parlours’ didn’t operate – not just cosmetic care, a chance for a head-to-toe transformation. She once said in a television interview after receiving the Padma Shri in 2013 that her biggest challenge when she started out was to convince other professionals – medical doctors and nutritionists – that the wellness industry is based on science. It took her many years to join the medical fraternity but she persevered.
Though Luthra has always positioned VLCC centers as clinics rather than beauty parlours, the beauty segment continues to be a significant part of the business, accounting for nearly 70 per cent of the revenue. Although the group and its subsidiaries operate a network of 210 retail clinics in 118 cities across 13 countries in South Asia, the Middle East and Africa, the big revenue earner is the 170-odd beauty, skin care and wellness products that it sells across its three plants. Makes from in India and Singapore.
Why the Luthras decided to hand over control to a private equity player at a time when the health and wellness sector in India has started growing rapidly, remains a mystery. The inability to really go public with a stock issue could be one reason. The company had made several attempts to go public in the past. The first announcement of intent was in 2010. In 2017, Mint quoted Luthra as saying that the company intended to launch its IPO that year and that a prospectus would be filed with markets regulator SEBI within “weeks”.
The most serious attempt happened in 2021, when VLCC actually filed a draft red herring prospectus with SEBI and received the regulator’s nod to go ahead with the proposed new equity issue. 300 crore and offer for sale of 89.23 lakh promoter’s shares. Each time, however, market conditions actually got in the way of the issue.
However, VLCC’s fortunes were hit hard by Covid. From pre-pandemic revenue in 2019 861.3 crore, the income had fallen 565.2 crore in FY21, as per SEBI filing. thanks to other income 32 crores, the company announced a restated profit 5.14 crore for the year but the trend was not encouraging. The deficit had more than doubled in the last two years, from Over 49.4 Cr in FY19 132 crore in FY20.
The repeated failure to go public could be the reason why the Luthras chose the private equity route to cash out. Or maybe, at 63, the grandmother of three is planning to embark on a new journey. Although she will continue to hold a “significant minority stake” in the company, according to Carlyle, it is clear that the baton of active management will pass to new people joining the board. Yet, Luthra’s path-breaking journey has not only inspired but paved the way. Paving the way for a new generation of women entrepreneurs in India.
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