Honasa Consumer (MAMA EARTH) to Debut IPO on October 31

Honasa Consumer, the parent company behind renowned brands such as Mamaearth, The Derma Co, and Aqualogica, has unveiled plans to initiate its initial public offering (IPO) on October 31, despite industry apprehensions. This move follows the approval granted by the Securities and Exchange Board of India (SEBI) in August to the Gurugram-based direct-to-consumer (DTC) company for its IPO.

The primary objective for Honasa is to secure a substantial Rs 10,500 crore through the IPO, complemented by a pre-IPO round within the range of $120-150 million. The company has allocated shares worth Rs 1 crore exclusively for its workforce. The IPO will encompass both a fresh issuance of shares amounting to Rs 365 crore and an offer for sale (OFS) of 4.12 crore equity shares. If the issue size attains Rs 1,700 crore, the OFS could potentially reach around Rs 1,335 crore.

The proceeds garnered from the IPO have earmarked purposes, which include bolstering advertising efforts, inaugurating new exclusive brand outlets (EBOs), and setting up fresh salons within its subsidiary, BBlunt. The remaining capital will be allocated for general corporate requirements and potential acquisitions.

By FY23 revenue, Honasa has solidified its position as India’s largest digital-first beauty and personal care company, demonstrating a significant revenue growth with a compound annual growth rate (CAGR) of 80.14% between FY21 and FY23. Despite encountering a net loss of Rs 142.8 crore in FY23 due to goodwill impairment losses, the company showcased a remarkable surge in EBITDA, recording an almost 98% year-on-year (YoY) increase to reach Rs 22.8 crore. Furthermore, the net profit for the June FY24 quarter reached Rs 25.96 crore.

Currently, the company’s promoters maintain a stake of 37.41%, while public entities such as Fireside Ventures Fund and Sequoia Capital possess the remaining shares. The basis of allotment for the IPO is scheduled to be concluded on November 7, with successful investors set to receive credited shares in their demat accounts on November 9. The equity shares are anticipated to be listed starting from November 10.

The IPO is being managed by Kotak Mahindra Capital Company, while KFin Technologies is serving as the registrar. Honasa offers a comprehensive array of products spanning various categories, encompassing baby care and hair care.