Mamaearth's parent firm Honasa Consumer to launch IPO on October 31, listing on Nov 10

Direct-to-consumer brand Mamaearth's parent firm Honasa Consumer Ltd will be floating its initial public offering (IPO) on October 31. The anchor book of the issue will be opened for a day on October 30, while the offer for the public will be closed on November 2, as per the company's red herring prospectus filed with the Securities and Exchange Board of India (Sebi).

The company will be issuing fresh shares worth Rs 365 crore along with an offer for sale (OFS) of 41.25 million shares, which is slightly smaller than what was previously planned -- fresh issue of Rs 400 crore and an OFS component of 46.82 million shares. Honasa Consumers had filed its draft red herring prospectus with the capital markets regulator Sebi in December 2022 and received the regulatory approvals in August this year.

The listing of its equity shares will take place on the BSE and NSE, with effect from November 10, the T+6 timeline, as per the IPO schedule.

Co-founded in 2016 by husband-wife duo Varun and Ghazal Alagh, Honasa Consumer attained unicorn in January 2022. The company had raised $52 million by Peak XV Partners (formerly known as Sequoia Capital) at a valuation of $1.2 billion.

Existing investors Fireside Ventures, Stellaris Venture Partners, Sofina Ventures, as well as high net-worth individuals Kunal Bahl, Rishab Mariwala, Rohit Bansal, and Shilpa Shetty will be selling some of their shares through the IPO. The direct-to-consumer (DTC) firm, which manufactures beauty, babycare and skincare products, has reserved Rs 1 crore worth of shares for its employees.

At present, Varun and Ghazal Alagh collectively own 43.54 per cent stake, while Peak XV Partners is the other major shareholder, which owns 20.94 per cent, followed by Fireside Ventures nd Stellaris - 15.01 per cent and 11.24 per cent, respectively.

Peak XV Partners will not be participating in the OFS. In March, Honasa CEO Varun Alagh had told Reuters that its largest investor, Peak XV Partners, would not be selling any shares in the IPO and the founders would own more than 97 per cent of their shares post IPO.

Kotak Mahindra Capital, JM Financial, Citi and JP Morgan are the investment banks working on the IPO and Cyril Amarchand Mangaldas, IndusLaw and Khaitan & Company are the legal advisors to the IPO. KFin Technologies is the registrar for the mega issue.

Honasa Consumer reported revenue from operations of Rs 464.49 crore in Q1 FY24, which was 49 per cent more than the revenue a year-ago period. For the three-month period, the company, which operates brands such as Aqualogica, Ayuga, BBlunt, and The Derma Co in addition to Mamaearth, registered a net profit of Rs 9.24 crore from a year-earlier loss of Rs 2.51 crore.

For FY23, the omnichannel retail company reported a net loss of Rs 150.97 crore, compared with a net profit of Rs 14.44 crore in FY22. Operating revenue, however, grew 58 per cent year-on-year to Rs 1,492.75 crore.

Its EBITDA rose rising nearly 98 per cent on-year to Rs 22.8 crore with a margin expansion of 30 bps at 1.52 per cent for the year FY23.

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