The Ullu IPO: From Getting Quickly Profitable To Filing IPO

Ullu IPO

Ullu IPO has created a humongous buzz around the market mavens with its plans to raise around Rs.135-150 crore! Let me tell you that this is no joke when it comes to SME IPO. If Ullu IPO becomes successful, it will become the largest SME IPO in terms of financial size.

Ullu IPO

That’s what makes Ullu IPO so special in the market.

But the question arises how did Ullu IPO achieve this feat? 

You may say that Ullu succeeded by presenting adult content, making individuals addicted to indecent series, targeting the audience of tier 2 & 3 cities, offering risqué themes, etc. Well, that’s true. This is what people call a business, you know… Unless and until it breaks any laws/rules/regulations, the government is completely fine with such OTT platforms.

The adult-themed content is one of the key USPs of Ullu. Simultaneously, its revenue started growing two-fold.

Ullu IPO is a long story. If you are interested in diving deeper into the Ullu IPO journey, then stick to this write-up because we will decode it thoroughly.

Stay tuned!

(A) What is Ullu?

Ullu, an Over-The-Top (OTT) media streaming platform, was founded by Vibhu Agarwal, who also owns Atrangii, a platform with content similar to Ullu. Ullu is distinguished for producing bold B-grade content, often featuring specific models across its shows.

Before diving further into the deeper understanding of Ullu IPO, let’s have a look at its profile-

Name of the CompanyUllu
Type of BusinessPrivate Company, Dot-com Company
Type of SiteWeb Portal, 
Video Streaming, 
Video-on-demand
Available in Hindi
HeadquartersIndia
Launched25th Dec 2018
OwnerVibhu Agarwal
IndustryStreaming (OTT Platform)
ProductsUllu Web Series,
Ullu Shorts,
Ullu Original Films
ServicesEntertainment Media,
Movies,
Songs,
Short Films
CompetitorsMX Player,
ALTBalajii,
Chaupal
Ullu: A Brief Overview

The content is notably centered around themes of sex and sensuality, leading to consistent criticism from both the public and governmental bodies for perceived vulgarity and obscenity.

In response to the concerns raised, regulatory authorities issued a directive to ULLU to remove content deemed ‘obscene.’ This directive followed a complaint filed with the Digital Public Complaints Grievance Cell (DPCGC), alleging that ULLU’s web series primarily consisted of explicit content and nudity, violating IT Rules 2021 and IT Act Section 67-A. These legal provisions specifically prohibit the publication and transmission of obscene and sexually perverted materials.

The broader context reveals that India has long been grappling with concerns regarding obscenity in online content, prompting authorities to call on streaming platforms to exercise caution in curating and disseminating their content.

Notably, in November 2023, the Ministry of Information and Broadcasting introduced the Broadcasting Service (Regulation) Bill 2023. This legislative proposal aims to regulate OTT content through the establishment of a Programme Code and Content Evaluation Committee. 

The bill is currently undergoing a period of public consultation, emphasizing a collaborative approach to address concerns related to content regulation in the rapidly evolving digital media landscape.

(B) Synopsis of Ullu IPO

By seeing the topic you must have understood that Ullu IPO has become the talk of the town. Ullu Digital, the over-the-top streaming gem, is gearing up for something big – they’ve just thrown in a draft red herring prospectus (DRHP) for their upcoming initial public offering (IPO). 

It’s not just any IPO, they’re eyeing a hefty Rs.135-150 crore raise, and it’s got everyone buzzing.

Reason?

Up to 62,62,800 equity shares are on the table, making this potentially the most significant SME IPO ever. What’s intriguing is that the IPO doesn’t have an offer for sale (OFS) component, giving it a unique twist, as spilled by Entrackr.

If Ullu IPO succeeds, then it is going to be the largest SME IPO in terms of financials. Let’s look at some data-

IPO in SME SegmentFinancial Size
Ullu IPO Rs.135-150 crore
(expected)
Spectrum Talent ManagementRs.105 crore
Aashka HospitalsRs.101.6 crore
Baweja StudiosRs.97 crore
Khazanchi JewellersRs.97 crore
Wise Travel IndiaRs.94.7 crore
Size of IPO of different firms in the SME Segment

Now, here’s where it gets personal. 

Ullu’s master plan? Well, those fresh funds are destined to spark a creative explosion – new content, more talented folks joining the Ullu family, and snagging some international shows. It’s like giving wings to their entertainment dreams!

Oh, and let’s talk ownership vibes. The power duo, Vibhu Agarwal and Megha Agarwal, proudly hold a whopping 95% of Ullu’s shares, painting a vivid picture of commitment. As for the supporting cast, Zenith Multi Trading DMCC grabs a 5% stake – teamwork makes the dream work, right?

Diving into the money talk, Ullu flaunted Rs.58.33 crore in revenue and a whopping Rs.12.28 crore profit between April and September this FY24. And get this – they’ve got a fan club of 20,92,975 subscribers as of September 2023. As if they’re building a tribe!

Now, here is the fortunate part for Ullu IPO financials – revenue from operations doubled, from Rs.46.8 crore in FY22 to a jaw-dropping Rs.93.1 crore in FY23. 

Ullu’s not just streaming; they’re making waves. Through adult indecent content… of course!

Let’s see whether this rollercoaster of adult content takes Ullu IPO to the next level or not! 

(C) Buzz around Ullu IPO: Key Reasons

Here comes the key part- why there is so much buzz around Ullu IPO? In the following table, we will look into the reasons one by one-

Key ReasonsDetails
Record-Breaking Fundraising: Biggest SME IPO EverUllu Digital is making headlines with its ambitious move to file a draft red herring prospectus (DRHP) on the BSE SME platform, aiming to raise a substantial amount of funds through an initial public offering (IPO). Reports suggest that the issue size could reach an impressive Rs.135-150 crore, setting a new record as the largest-ever IPO for any Small and Medium Enterprise (SME) company.
Fresh Equity Sale with Unique StructureThe IPO strategy adopted by Ullu Digital is distinctive. The entire offering comprises a fresh equity sale of 62.62 lakh shares, with no offer-for-sale (OFS) component. This structure emphasizes the company’s commitment to generating new capital for growth.
Reserved Quotas for Investor CategoriesUllu Digital is ensuring inclusivity in its IPO by reserving specific quotas for different investor categories. Approximately 50% of the offering is earmarked for qualified institutional buyers, 35% for retail investors, and 15% for non-institutional investors, fostering a diverse participation.
Ullu Digital: An OTT Streaming PlatformUllu Digital is an Over-The-Top (OTT) streaming platform dedicated to various facets of content distribution, exhibition, exploitation, promotion, marketing, and delivery through its platform named “Ullu.” The platform offers an array of web series, short films, and shows spanning genres like romance, drama, thriller, comedy, and more.
Collaborative Content Creation ModelUllu Digital engages in collaborative content creation by partnering with production houses, independent creators, and writers. While these collaborators lead in developing concepts, scripts, and storylines, Ullu Digital actively participates in budget decisions, reviews, and feedback processes. The on-the-ground execution is primarily handled by the production houses.
Utilization of IPO ProceedsThe funds raised through the IPO will serve a multi-faceted purpose. Ullu Digital plans to allocate the net proceeds for the production of new content, acquire international shows, expand its workforce through new hires, and meet working capital requirements.
Financial Snapshot: Growth and ProfitabilityFor the period ending September 2023, Ullu Digital reported robust financials. Revenue from operations reached Rs 58.83 crore, demonstrating the platform’s revenue-generating capabilities. The profit after tax stood at an impressive Rs 12.27 crore, reflecting the company’s commitment to both growth and profitability.
Key Players in IPO ManagementNarnolia Financial Services takes the lead as the sole book-running lead manager for the IPO, underscoring its pivotal role in facilitating the offering. Skyline Financial Services is appointed as the registrar, ensuring streamlined management of the IPO process. 
Factors responsible for Ullu IPO success

These reasons add a layer of expertise and credibility to the journey of Ullu IPO.

(D) Financials of Ullu 

As per the financial statements of Ullu, its income rose 2X while its profits increased 4X. Its operating revenue in FY23 was Rs.93.1 crore while in FY22, it was Rs.46.8 crore. That’s a two-fold increase!

Let’s look at the overall financial performance of Ullu-

Financial AspectsFY22FY23% increase
Operating RevenueRs.46.80 croreRs.93.10 crore98.93%
Total ExpensesRs.41.40 croreRs.72.30 crore74.64%
ProfitsRs.3.90 croreRs.15.10 crore287.18% 
Financials of Ullu

The firm experienced a surge in overall expenditure by 74.64%, reaching Rs.72.3 crore in FY23 from Rs.41.4 crore in FY22, attributed to various factors such as employee benefits, legal cum professional expenses, rent, information technology, and other overheads.

Leveraging a growing scale and implementing a prudent cost mechanism, Ullu achieved a substantial 3.87X increase in profits, reaching Rs.15.10 crore in FY23 compared to Rs.3.90 crore in FY22. 

Notably, the Return on Capital Employed (ROCE) and Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin showed improvement, standing at 91% and 24%, respectively. At a unit level, the company spent Rs.0.78 to earn a rupee in FY23.

Now, let’s look at the current shareholding pattern of Ullu-

Shareholders% of Shares Owned
Vibhu Agarwal61.75%
Megha Aggarwal33.25%
Zenith Multi Trading DMCC5%
Shareholding Pattern of Ullu

By September 2023, the company boasted a subscriber count of 20,92,975. Nevertheless, there was a noticeable decline in the user base, witnessing a decrease of over 24% from the March 2023 figure of 27,59,397 subscribers. Comparatively, at the end of March 2022 and 2021, the company had subscriber counts of around 17,70,439 and 11,46,646, respectively.

(E) Success Story of Ullu IPO: How an adult-focused platform became the largest SME IPO?

A few years back, terms like “OTT” and “Ullu” weren’t synonymous with success in the Indian market. Especially for Ullu, colloquially meaning ‘stupid’ in Hindi, an OTT platform primarily known for its adult-themed content, the path to becoming India’s largest SME IPO was indeed unconventional. 

Let’s look at the journey and success story of Ullu IPO-

Vibhu Agarwal: The Serial Entrepreneur’s Shift to Media

Founder of Ullu

Vibhu Agarwal, the founder and CEO of Ullu, was no stranger to entrepreneurship. A software engineer turned businessman, he had explored various ventures, from a steel business to running a chain of schools. However, it was his fascination with movies that led him to the media industry in 2012.

A Bumpy Start: Lessons from Baat Ban Gayi

Agarwal’s initial foray into the film industry with the movie “Baat Ban Gayi” in 2013, featuring stars like Gulshan Grover and Ali Fazal, didn’t pan out as expected. Despite the setback, Agarwal was undeterred, seeing the failure as an opportunity to learn and grow.

Identifying a Gap: The Birth of Ullu

Analyzing the challenges faced by aspiring filmmakers in Bollywood, Agarwal recognized a niche – helping release movies. Inspired by global streaming trends and the rise of Jio’s affordable data plans in late 2016, he decided to venture into the OTT space. 

In 2018, Ullu was born, with a focus on Tier 2 and 3 cities and content catering to the unique tastes of this audience.

Riding the Waves: Pandemic-Induced Surge

While Ullu quickly found its footing, the real breakthrough came during the pandemic. With Indians seeking entertainment during lockdowns, Ullu’s app witnessed a surge in downloads, including unexpected users like drivers and cooks. By mid-2020, it had amassed over 10 million downloads, predominantly from smaller Indian cities.

Creative Process: Engaging Users and Original Content

Agarwal remains hands-on in the creative process, actively involving users in script suggestions and ideas. Ullu’s content creation involves collaboration with production agencies, ensuring a diverse range of stories. The platform has evolved into a content powerhouse, even partnering with established players like MX Player.

Subscription Success: Tailored Plans and Financial Growth

Ullu App Subscription

Ullu’s subscription success is evident in its 21 lakh paying subscribers, a notable feat compared to Netflix’s 65 lakh Indian subscribers. Cleverly tailored subscription plans encourage longer commitments, contributing to revenue growth. In the half-year period from April to September, Ullu registered revenue of Rs.58 crore and a profit of Rs.12.28 crore, marking a significant financial milestone.

Challenges: Regulatory Scrutiny and Defense

While Ullu’s adult-themed content attracted a significant user base, it also drew regulatory attention. A complaint filed against the platform triggered regulatory scrutiny, with authorities ordering content takedowns. Ullu, in defense, emphasized personal discretion and cited constitutional rights like freedom of speech and expression.

Strategic Move: Ullu’s Journey to India’s Largest SME IPO

Now, Vibhu Agarwal is steering Ullu towards India’s largest SME IPO. Despite the unconventional mix of running a chain of schools and an adult-focused OTT platform, Agarwal focuses on business metrics. As Ullu prepares to go public, it stands out as one of the more unconventional IPOs in recent times, showcasing Agarwal’s resilience and business acumen in transforming challenges into triumphs.

Note: When it comes to IPO, Ola Electric IPO has also created a huge buzz in the public. Folks are wondering whether it will be a success or not. We have thoroughly covered the topic “Will Ola Electric IPO be a success? Complete breakdown.”

(F) Conclusion & Future Prospects of Ullu IPO

Ullu app

Now, it’s time to wrap up! The Ullu IPO stands as a testament to the unconventional success story of an adult-focused OTT platform evolving into a financial powerhouse. The Ullu IPO, set to become India’s largest SME offering, reflects the strategic brilliance of Vibhu Agarwal and his team in navigating challenges and capitalizing on emerging opportunities. 

As you observe the Ullu IPO, it’s noteworthy that the company’s trajectory, marked by a unique content approach and a surge in subscribers during the pandemic, has led to substantial financial growth. 

Ullu IPO’s emphasis on inclusivity, with reserved quotas for various investor categories, adds an interesting layer to its market debut.

Looking ahead, the future prospects of Ullu IPO seem promising, driven by its robust subscriber base, prudent cost mechanisms, and diverse content portfolio. The surge in downloads from smaller Indian cities indicates the platform’s growing popularity beyond urban landscapes. 

As you evaluate Ullu IPO’s potential, consider the platform’s resilience, financial performance, and the dynamic leadership steering its course. The IPO’s success could redefine norms in the OTT space, making Ullu IPO a distinctive player to watch in the evolving landscape of digital entertainment.

Ullu continues to receive tons of criticism due to its obscene content despite its success (Ullu IPO). What are your thoughts on this? Don’t forget to share your thoughts in the comment section below!

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Published By: Supti Nandi
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Lakshay Bansal
Lakshay Bansal
16 days ago

Have heard of this platform and it’s free subscription period. Gonna try it once!