Vibhuti which hold spiritual significance is made out of remains of homam, burnt dried woods or dried cow dungs.
It is believed that vibhuti is applied to honour Lord Shiva, as well as to remind us that at the end of our lives we will end up as nothing but a handful of ash.
Besides reminding us of the end and keeping us humble, these are the other reasons behind this practice:
It's miraculous healing properties
Vibhuti has certain healing properties that help to relieve some illnesses. Our ancestors practiced applying vibuthi on a daily basis as it prevents from falling sick.
The ash is said to absorb excess moisture from the body which helps to relieve from cold and headaches.
Helps to ward off evil
It is believed that vibhuti will help to ward off evil. But in reality, the ash will soothe the nerves when we are feeling frightened, confused or disturbed. It can also be used as a remedy when we are suffering from a lack of sleep.
Check out this video to learn more about the reason behind applying vibhuti:
Source: Speaking Tree and Indian Mirror