Manish Grover, one of the three producers of PM Narendra Modi, a biopic starring Vivek Oberoi as prime minister Narendra Modi, is listing his company Jeena Sikho Lifecare (JSL) on the SME platform through a ₹55.50 crore initial public offer (IPO) at a premium of ₹140 a share (face value ₹10). Grover along with Sandip Ssingh, Anand Pandit, and Suresh Oberoi had co-produced the movie, which was released in 2020.
It’s pertinent to note that in the run-up to the IPO, the promoter issued bonus shares to himself, thus bringing his average cost of acquisition per share to a negligible 11 paise per share (See: All in the family). At the time of incorporation, the company had issued initial equity shares at par (₹10 face value) to the promoter. The company further issued equity shares through a rights issue at ₹1,367 per share in February 2021, followed by bonus shares in the ratio of 90 for 1 in August 2021. As a result of the bonus issue, the prospectus states the net cost of acquisition of shares for the promoter has turned "negative". Yet, investors have lapped up the IPO at ₹150 a share with the issue closing with an over-subscription of 2.24 times.
More commonly known through his YouTube moniker, Acharya Manishji, the 47-year-old commerce graduate and his wife are promoters of JSL, which manufactures ayurvedic products and runs clinics under the brand name of Shuddhi. Claiming to be a proponent of holistic living, the company, with a net worth of ₹24 crore, is looking to raise funds to spend ₹15 crore on marketing and sales promotion, ₹11.80 crore for retiring unsecured debt taken from seven private entities, ₹23.37 crore for working capital and ₹4.73 crore for general corporate purposes. Post issue, the promoters will hold 66% stake, while the public will own the rest. Interestingly, the prospectus states that some of the unsecured loans are “not repayable in accordance with any agreed repayment schedule.”
The Mohali-based company, with a turnover of ₹136 crore as of FY21 and profit of ₹10.15 crore, claims it is “world leader” in ayurveda with a portfolio of over 250 ayurvedic products besides conducting health checkup camps, and yoga sessions “to make people aware of their health problems”. Back in 2017, a team of doctors from the Haryana’s health department had raided a store of group concern, Divya Upchar Sansthan, on the allegation that the centre is selling a drug, ‘Divya Kit’ for ₹4,200 with claims that all diseases can be cured from this medicine. The prospectus states that the company has not “received any formal clean chit from the Chandigarh Union Health Department.” Besides the detox product, the company produces “packs” for nervous care, lungs care, hair care, and weight gain. Over 91% of its revenues come from Punjab (62%) and Delhi (29%).
There are other red flags in the IPO as well. For instance, the company’s registered office located at Zirakpur in Mohali is not owned by the company, but by Grover through a HUF structure. The prospectus states that “the premises have been taken on lease basis for a period of 11 months commencing from July 31, 2021 from & on behalf of Manish Grover & HUF represented by Mr. Manish Grover who is promoter/director of our company.” When such related party transactions are accompanied by clauses that state “there can be no assurance that such transactions, individually or in aggregate, will not have an adverse effect on our financial condition and results of operation” that reflects on the management. Interestingly, the prospectus goes on to state that one of the qualitative factors in determining the price is the company’s “corporate governance” standards! The prospectus also states that JSL doesn’t own the majority of premises for operating clinics, and rent agreements have been executed for all clinics operated by the company. Neither does the company own production facilities and relies on third-party manufacturers. Yet, the balance sheet shows "property, plant and equipment" worth ₹22.50 crore.
Grover says he has been inspired by Narendra Modi’s life. “What’s more, he has been working hard to promote the concept of ‘Made in India’, which includes propagating India’s 5,000-year-old herb-based medicinal science – Ayurveda, something which I have been passionately doing since 1997,” Grover had said at a media interaction in Chandigarh.
Looks like Grover now has investors to fund his passion.