Alpha Wave Global in advanced talks to pick up minority stake in VLCC backed by Carlyle

In January 2023 Carlyle acquired a 66 percent controlling stake in VLCC from its founders Vandana and husband Mukesh Luthra for around $300 million

US private equity firm Alpha Wave Global is in advanced talks with Carlyle Group to pick up a minority stake in beauty and wellness services and products company VLCC, people aware of the matter told Moneycontrol.

Alpha Wave is looking to pick up a 25-30 percent stake in the company at a valuation of around $700-800 million, they added.

Carlyle, in January 2023, acquired a 66 percent controlling stake in VLCC from its founders Vandana and husband Mukesh Luthra for around $300 million, in one of its big bets on the Indian consumer segment in recent years.

The Luthras hold a 30 percent stake in the company, with management and senior employees holding the remaining 4 percent.

Founded in 1996, VLCC Health Care Limited provides beauty, slimming, fitness and health services across domestic and international markets. It also sells beauty and personal care products.

While Carlyle declined comment, a query sent to Alpha Wave Global had not elicited a response till the time of publication.

Alpha Wave has invested in several Indian companies such as Lenskart, Aye Finance, Biryani By Kilo, Cars24, Chaayos, CRED, Dailyhunt, Delhivey, Dream11, Mensa and Ola.

VLCC financials

According to a May 31 report by credit rating firm ICRA, VLCC’s revenue grew by 19 percent to Rs 958 crore in FY24 from Rs 807.2 crore in FY23.

“The same was driven by 19 net centre additions and a 20 percent growth in same-store sales for the slimming and beauty business. Resumption in discretionary spending post the pandemic with inclination towards health-based slimming and other activities resulted in increased revenue per centre,” the report said.

ICRA expects VLCC to continue to see low double-digit growth in revenue in the near term, supported by new centre additions.

As of March 31, VLCC had 192 wellness centres and 95 education/vocational institutes in India. It also has 25 centres abroad.

The report said the company’s operating profit margin, in spite of 40 basis points moderation in FY2024 to 23.3 percent, remained healthy. The moderation was driven by a significant increase in marketing spend, which was expected to continue in the near term, it said.

In June 2023, VLCC acquired Ustraa from Happily Unmarried Private Ltd for Rs 192 crore, diversifying its business into the men’s grooming category from a predominantly women-focused approach of the past.

While this resulted in a moderation in the liquidity position of the company, the management was confident of leveraging Ustraa’s online presence to cross-sell VLCC’s products and VLCC’s offline presence to cross sell Ustraa’s products, the report said.