Veranda Learning Solutions IPO to issue next week; here're things you need to know

Veranda Learning Solutions is going to launch its initial public offering (IPO) next week on March 29, through which the company plans to raise Rs 200 crore. Here’re 10 things for investors to know about the public issue.

Important dates

The IPO will open for subscription on March 29. The IPO by the learning solutions company will close on March 31, the basis of allotment will be finalised on April 5, refunds and credit of shares to demat account will be initiated on April 6 while the IPO listing is likely by April 7.

Price band

The company has fixed a price band at Rs 130-137 per share. Before filing the red herring prospectus, Veranda Learning raised Rs 40 crore by issuing 30.8 lakh equity through a private placement to the public category.

Lot size

Investors can make bids for a minimum of 100 equity shares and in multiples of 100 shares thereafter. A retail investor can apply for up to 14 lots (1,400 shares or Rs 191,800).

Offer size

Veranda Learning Solutions’ initial public offering will see the issuance of equity shares of a face value of Rs 10 each aggregating up to Rs 200 crore.

Funds utilisation

The net proceeds of the offer will be utilised by the company for repaying of debts (Rs 60 crore), payment of acquisition consideration of Edureka or repayment of a bridge loan availed specifically for the purpose of discharge of such acquisition consideration of Edureka (Rs 25.2 crore), and growth initiatives (Rs 50 crore).

Reserved Portions

As per the red herring prospectus, up to 75 per cent of the total offer is reserved for qualified institutional buyers (QIBs), not more than 15 per cent for non-institutional bidders (NIIs), and the remaining 10 per cent for retail investors. Up to 60 per cent of the QIB portion may be allocated to the anchor investors, who bid one working day prior to the offer opening date.

The company

Veranda, which started its operations in December 2020, provides preparatory courses for students preparing for UPSC exams, state public service commissions, SSC, banking, insurance, railways and chartered accountancy, through four wholly-owned subsidiaries for different exams — Veranda Race Learning Solutions, Veranda XL Learning Solutions, Veranda IAS Learning Solutions, and Brain4ce Education Solutions (Edureka).

The company provides its services through online-offline hybrid and offline blended learning models.

During the nine-month period ended December 31, 2021, a total of 42,667 students and professionals enrolled across the courses offered by the company, 16,793 being in offline models and 25,874 in online model.

Veranda’s financials

In the financial year 2020-21 and for the six-month period ended September 30, 2021, the company generated a total revenue of Rs 2.5 crore and Rs 15.66 crore, respectively, as per red herring prospectus.

Its Ebitda (earnings before interest, taxes, depreciation and amortisation) for April-September 2021 stood at Rs 15.2 crore.

In fiscals 2019, 2020 and 2021, the company’s Ebitda (earnings before interest, taxes, depreciation and amortisation) of Rs 9.8 lakh, Rs 19.6 lakh, and Rs 7.63 crore, respectively; and a net loss after tax of Rs 9.8 lakh, Rs 19.6 lakh and Rs 8.27 crore, respectively.

Online & Offline businesses

Online business: Out of the total, its online business accounted for Rs 2.37 crore and Rs 6.78 crore for the full financial year 2021 and for the six-month period ended September 30, 2021, respectively.

Offline business: For the financial year 2021 and for the six-month period ended September 30, 2021, offline business accounted for Rs 4.4 lakh and Rs 6.87 crore, respectively.

Its promoters

The company’s promoters are Kalpathi S Aghoram, Kalpathi S Ganesh and Kalpathi S Suresh.

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