By now, I am sure you have heard about the upcoming IPO of Nureca Ltd. Just to give you a small recap about the Company, Nureca Ltd is a distributor of Healthcare and Wellness products. Their product portfolio includes Chronic Device Products, Orthopedic Products, Mother & child products, Nutrition supplements, and Lifestyle products, which I have already discussed on my YouTube Channel. It is the first digital company to sell such products through its website drtust.in and other online partners i.e., e-commerce players, retailers, and distributors. The IPO would be active between February 15th to 17th 2021 for an issue size of Rs. 100 Cr.
Today, I will be discussing something which caught my attention while researching Nureca IPO - Pending Litigation against the Promoters of the Company. So, let’s dive right into the Family drama.
Mr. Saurabh Goyal is the Chairman and Managing Director of the Company since 2020. Prior to that, he has been the director of the company since 2017. Then there is Mr. Aryan Goyal who is his brother. Mr. Aryan Goyal is the Chief Executive Officer of the Company since 2020.
Mr. Saurabh had over 10 years of work experience and Mr. Aryan had over 15 years of work experience with Nectar Life Sciences Limited before they joined Nureca Ltd. Nectar Life Sciences Limited (Henceforth mentioned as NLSL) is a pharmaceutical company promoted by Mr. Sanjiv Goyal, who is the father of Mr. Saurabh & Mr. Aryan. So, why are they still not with NLSL?
What went down between The Goyals’?
Mr. Saurabh and Mr. Aryan were working as Executive directors till 2014 and then acted as the Presidents till 2018 with NLSL. However, due to difference of opinions between the brothers and their Father-Mr. Sanjiv decided to part ways with NLSL. Post-retirement from NLSL, Mr. Saurabh and Mr. Aryan had gifted their holding in NLSL i.e., 243,000 equity shares and 290,000 equity shares, respectively, on July 25, 2019, to Mr. Sanjiv Goyal.
Mr. Saurabh had entered into “Family Partition deed” on September 10, 2020, which was executed between Him, his wife- Mrs. Smita Goyal, His Brother- Mr. Aryan, and his Wife- Mrs. Payal, and their father- Mr. Sanjiv and his wife- Mrs. Raman. As per this Deed, Mr. Saurabh and Mr. Aryan had issued an advertisement in the newspaper and filed a letter with SEBI and Stock Exchanges regarding their disassociation with NLSL by October 1st,2020. This simply means that Nectar Life Sciences would not be considered as the Group Companies of Nureca Ltd. Also, the parents- Mr. Sanjiv and Mrs. Raman are not included in the Promoter Group of Nureca.You might wonder that everything seems okay till now, then why do the brothers have pending Litigation, and what’s the connection with NLSL? Let me answer your question.The Pending Litigations against the Promoters of Nureca Ltd
Between 13th to 15th December 2020, a search and seizure operation was carried out by Income-tax Department at the residences of Mr. Saurabh and Mr. Aryan in the case of Nectar Lifesciences Limited. During this raid, they confiscated certain items such as cash, jewelry, and ornaments. On December 13th, 2020 another search and seizure operation was carried out at the residence of one of Nureca’s Director Mr. Rajinder Sharma in the case of Nectar Lifesciences Limited and Avensis Exports Private Limited. A mobile set was confiscated from him.
This is all that we know of from the Red Herring Prospectus of the Company. Why did the search and seizure operation happen? What’s the relation with NLSL? No such details about the litigation were mentioned in RHP. As of 29th January 2021, no further communication was received from Income Tax Authorities regarding both the Search & Seizure operations as informed in RHP. Closing Thoughts
All that we know is something is cooking between The Goyal’s Family. If the Goyal Brothers are proven to be Guilty in any of the cases with Nectar Life Sciences, it might harm the image and ultimately the financials of Nureca Ltd. Investors should keep an eye on how the case unfolds and need to be cautious while investing in the Company.
