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Jaishrikrishna
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Quote Jaishrikrishna Replybullet Topic: Jawed Habib Hair and Beauty Limited
    Posted: 03/Feb/2011 at 4:43pm

Popular hair dresser Jawed Habib has approached market regulator SEBI to raise Rs 60 crore through a public issue to expand his flourishing business in India and abroad.

Jawed Habib Hair and Beauty Limited has filed a draft prospectus with Securities and Exchanges Board of India to come out with the Rs 60 crore through initial public offering ( IPO )).

Promoted by hair stylist Jawed Habib Akhter, JHHBL will probably be the first entity of its kind to raise money by issuing equity to the public.

The company, according to the prospectus, will utilise the funds for acquiring brands in India and abroad, build its own brand, and expand the network of outlets across the country.

Habib, the prospectus said, comes from family of hair experts.

"Habib's ancestors were working with Indian hair since before the subcontinent's independence. His grandfather was barber to both the last British viceroy, Lord Mountbatten, and Jawaharlal Nehru, India's first Prime Minister", it added.

With 37 outlets in the year of incorporation in 2006, the company has grown rapidly and currently has eight own and 176 franchised outlets in 62 cities across India. It also runs 6 academic institutions and 35 franchise outlets across 36 cities.

The range of services provided by the company include haircut, hair styling, hair straightening, chemical hair treatments, hair colouring, , SPA treatment, and facial treatments.

The promoter of JHHBL, Jawed Habib has also set a world record of performing 410 non-stop haircuts in 25 hours and 42 minutes.

The hair and beauty salon industry in India has been estimated at Rs 6,900 crore up from Ra 1,500 crore in 2005. It is expected to reach Rs 29,800 crore in 2015 and surge to Rs 98,500 crore by 2020.

Recently they have opened 3 salons near my residence, when ever i pass through them, any time of the day, i see customers.

Would like everybody's view's on this one, would also like feedback's from different areas.

Basantjee, Kulman, gawdejee, Tcser, Chinki, Hitesh bhai,Prabhakar, topul, shadowfax, snehaljee, Umesh and other fellow teddies, kindly comment on the business model.

Edited by Jaishrikrishna - 03/Feb/2011 at 4:49pm
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basant
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Quote basant Replybullet Posted: 03/Feb/2011 at 4:55pm
What is the market cap post issue OR what percentage of shares are being sold to the public out of the post issue capital?

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Jaishrikrishna
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Quote Jaishrikrishna Replybullet Posted: 03/Feb/2011 at 5:01pm
Originally posted by basant

What is the market cap post issue OR what percentage of shares are being sold to the public out of the post issue capital?


Public issue of 600,000,000 equity shares of Rs 10 each. The issue constitutes 26.46% post issue paid up capital of the company.
Don't Buy and Hold, Buy and Homework / Fish see the bait,but not the hook; Men see the profit, but not the peril.
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Quote hit2710 Replybullet Posted: 03/Feb/2011 at 5:08pm
Jawed Habib does seem to have brand value in the hair grooming business. And there is a lot of scope for the company to grow. I have seen members of the family go to the javed habib centre and return very happy with the services rendered. And they do charge higher than the regular beauty parlors for their services.

If valuations are reasonable, this could be an interesting IPO to look forward to.
Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart.
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Jaishrikrishna
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Quote Jaishrikrishna Replybullet Posted: 03/Feb/2011 at 5:09pm

Few more details.......

Financial investor Sparrow Hill Advisory Pvt Ltd has exited its seven-month-old investment in beauty and hair care salon operator Jawed Habib Hair & Beauty Ltd (JHHBL) with 32% return ahead of the company filing for a public float. JHHBL is looking to raise Rs 60 crore through an initial public offering to acquire brands associated with hair and beauty care in Indian and abroad besides acquiring customised software, setting up exclusive brand outlets and repayment of debt among other plans. 

Sparrow Hill, that invested a total of Rs 5.96 crore in two tranches—Rs 3.96 crore in May 2010 and Rs 2 crore in October’10, sold its entire stake representing 44.35% to another investment entity Greenfield Investments 2 for Rs 8.12 crore in December. This works out to a pretty enviable annualised return. More information on Greenfield Investments’ parentage could not be gathered.


JHHBL is also backed by ad-for-equity investor Bennett Coleman & Co Ltd (BCCL is the publisher of English newspaper Times of India among others) through Brand Equity Treaties Ltd that had subscribed to a convertible debenture worth Rs 12 crore in September. It is to be converted into shares on or before June 2012 depending on IPO (if it is floated ahead then the conversion will be before the due date). The conversion price stands undisclosed.

The last transaction between Sparrow Hill and Greenfield Investments was at a price of Rs 17 per share. At this price the company was valued at just Rs 18 crore. However, with the company eyeing Rs 60 crore through the public float, it is looking at a substantial premium over Rs 17 per share.

A 25% equity dilution will value the firm at Rs 240 crore and a 50% equity dilution in the IPO would value it at Rs 120 crore (not counting the convertible debentures of BCCL). In either case, the pre-IPO financial investors will be sitting on a multibagger.

For the April 1- November 20, 2010 period the consolidated revenues of the company was Rs 28.58 crore with net profit of Rs 5.4 crore.
The company largely draws on the brand equity of celebrity hair dresser Jawed Habib Akhter whose grandfather was barber to both the last British viceroy Lord Mountbatten and Jawaharlal Nehru, India's first Prime Minister.

Besides hair and beauty care salons, through self owned and franchised outlets, it also runs academies for hair styling & beauty. It owns 8 outlets and runs 176 franchised outlets in 62 cities across India besides six self-run academies in addition to 35 others through franchised outlets across 36 cities.

Beauty and hair care industry is bustling with activity due to growing discretionary consumption expenditure on lifestyle related sectors in India. Recently Enrich Salon was in talks to raise $10 million from JM Financial India Fund and another BCCL-backed salon chain startup Birla Medspa (that has few outlets in Mumbai under the brand name Evolve) is also in the queue to raise Rs 65 crore through a public issue.

Earlier, Helion Venture Partners invested Rs 20 crore in YLG, a chain of salons and spas in 2009 while beauty and wellness player VLCC has also raised private equity funding from CLSA Capital Partners and Everstone Capital's Indivision fund. Healthcare and fitness chain Talwalkars went public last year.


Edited by Jaishrikrishna - 03/Feb/2011 at 5:10pm
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hit2710
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Quote hit2710 Replybullet Posted: 03/Feb/2011 at 5:12pm
Originally posted by Jaishrikrishna


Public issue of 600,000,000 equity shares of Rs 10 each. The issue constitutes 26.46% post issue paid up capital of the company.


There seems to be something wrong with one of the zeroes here. I assume you mentioned 60 crores.

I think there will be 6 crore shares of Rs 10 each. Dont know about premium though.
Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart.
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karn
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Quote karn Replybullet Posted: 03/Feb/2011 at 5:17pm
jaikrishna Ji,
I have one suggestion. Instead of copy paste, it would be great to just provide link to the article above (from VCC Circle). It would serve two purposes. One it would keep this thread compact and second is that copyright issues would not be violated.
Now regarding Habib salons, they are very popular amongst the wives of my friends.
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K.
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prabhakarkudva
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Quote prabhakarkudva Replybullet Posted: 03/Feb/2011 at 5:19pm
Mcap of about 250cr for an expected profit of about 6-7cr in FY11.

Hair and Beauty Industry size said to be 7000cr and expected to grow to 30,000 by 2015.
Samir Arora had bought a stake in a similar company called YLG.
Take your chances and keep them in a box until a quieter time.
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