MUMBAI, 26 OCTOBER, 2023 (GPN): Gurugram based Parent Firm of Mamaearth and India’s Top Digital-First Beauty and Personal Care (BPC) Company, Honasa Consumer Ltd, has announced the price band for its upcoming initial public offering (IPO). The company, which was launched in 2016 by husband wife duo,Varun Alagh and Ghazal Alagh who owns popular brands like Mamaearth and The Derma Co, has set the price band at Rs 308-324 per share. The IPO will open on October 31, with the anchor issue commencing on October 30 and the closing date set for November 2.

The IPO will consist of a fresh issue of Rs 365 crore and an offer for sale of up to 41.25 million shares. At the upper price band, the company aims to raise around Rs 1,701.44 crore, resulting in a valuation of Rs 10,424.53 crore. Earlier reports had suggested a price band of Rs 320-350, but it is unlikely to exceed Rs 350.

Several selling shareholders will participate in the offer for sale, including Varun Alagh, Ghazal Alagh, Fireside Ventures Fund, Sofina, Stellaris, Kunal Bahl, Rishabh Harsh Mariwala, Rohit Kumar Bansal, and Shilpa Shetty Kundra.

The basis of allotment for the IPO is scheduled for November 7, with refunds expected to be initiated on November 8. Honasa Consumer Ltd is set to be listed on exchanges on November 10.

The net proceeds from the IPO will be utilized for various purposes, such as advertisement expenses to enhance brand visibility and awareness, setting up new exclusive brand outlets, investment in BBlunt for the establishment of new salons, general corporate purposes, and inorganic growth.

Despite reporting a net loss of Rs 142.8 crore, Honasa Consumer Ltd has emerged as India’s top digital-first BPC company by FY23 revenue. With a 28.9% direct-to-consumer BPC market share in 2022 and a 1.5% share in the overall BPC market, the company’s FY23 revenue stood at Rs 1,492.75 crore.

Honasa Consumer Ltd’s IPO presents an opportunity for investors to be part of India’s leading digital-first BPC company, with strong market shares and promising growth potential. The funds raised through the IPO will support the company’s expansion plans and strategic initiatives.

Kotak Mahindra Capital Company Limited, Citigroup Global Markets India Private Limited, JM Financial Limited and J.P. Morgan India Private Limited are the Book Running Lead Managers to the offer.

RHP Link: https://honasa.in/wp-content/uploads/2023/10/Red-Herring-Prospectus.pdf

About Honasa Consumer Limited

Honasa Consumer Limited is the largest digital-first beauty and personal care (“BPC”) company in India in terms of revenue from operations for the Financial Year 2023 (Source: RedSeer Report). Since its inception, Honasa Consumer has worked with the primary objective of developing products that address beauty and personal care problems faced by consumers. Company’s flagship brand, Mamaearth, is built to service a core customer need for safe-to-use, natural products, and focuses on developing toxin-free beauty products made with natural ingredients. According to the RedSeer Report, as of the Financial Year 2023, Mamaearth has emerged as the fastest growing BPC brand in India to reach an annual revenue of ₹10 billion (in the preceding 12 months) within six years of launch.

Since launching Mamaearth in 2016, Honasa has  added five new brands to its portfolio, namely The Derma Co., Aqualogica, Ayuga, BBlunt and Dr. Sheth’s, and have built a ‘House of Brands’ architecture. As of June 30, 2023, company’s portfolio of brands with differentiated value propositions includes products in the baby care, face care, body care, hair care, color cosmetics and fragrances segments.

As per RedSeer Report, Honasa Consumer is the largest company in the DTC BPC market in India in terms of revenue generated from the DTC channel in Financial Year 2023.  Its brand Mamaearth was ranked amongst the top three in terms of awareness in the grooming category on Flipkart between May 2021 and July 2023 and Mamaearth was India’s most-searched BPC brand on Google Trends between January 2020 and June 2023.

The Company makes products available to customers through Omni-channel distribution networks across both online and offline touchpoints. Its modern trade channel includes a network of 31 retail chains, as of June 30, 2023, with whom it has contractual arrangements for the sale of products. These retail chains include national retail chains, regional retail chains, pharmacies, and cash-and-carry stores across India. For the period of July 2023, the Company is estimated to have retailed products through 154,447 FMCG retail outlets in India. Its offline channel consists of general trade channels and modern trade retail channels, and is supplemented by 85 EBOs across India as of June 30, 2023. The Company accesses this channel through its network of distributors, super distributors and sub-stockiest (total of 220 by FY23).

Honasa continuously seek to connect better with its consumers and strengthen its brand equity by building ‘purpose driven’ brands that are associated with environmental and social impact causes. Through the Mamaearth ‘Plant Goodness’ initiative, company work with a non-government organisation to plant trees for orders placed on its direct-to-consumer (“DTC”) platform and share geo-tagged images of these trees with its consumers. Similarly, The Derma Co. is associated with a ‘Young Scientists’ program wherein children in certain rural parts of India are provided with access to education in science, and Aqualogica is associated with a ‘Fresh Water for All’ initiative wherein company help enable access to clean drinking water for marginalized communities.