Mama Earth to Launch ₹1700 Cr IPO on October 31, 2023

Honasa Consumer Private Limited, the parent company of renowned brands like Mamaearth, The Derma Co, and BBlunt, is gearing up to launch one of the most eagerly awaited Initial Public Offerings (IPOs) in the Indian consumer segment. This rapidly growing direct-to-consumer (D2C) firm, known for its presence in the beauty, baby care, and skincare sectors, made headlines as the first unicorn of 2022. This status was confirmed when it secured $52 million in funding, valuing the company at $1.2 billion during a fundraising round in January 2022. The IPO is scheduled to launch on October 31, following regulatory approval from the Securities and Exchange Board of India (SEBI) in August 2023, subsequent to the submission of draft papers in December 2022.

Honasa Consumer Private Limited was co-founded in 2016 by the husband-wife duo, Varun and Ghazal Alagh, who gained recognition on the popular show 'Shark Tank.' Their journey led Honasa to become a unicorn

The IPO Plans

As per information disclosed in the Draft Red Herring Prospectus (DRHP), Honasa Consumer intends to raise approximately Rs 1,700 crore through a combination of a fresh issue and an offer-for-sale (OFS). Shareholders who will reduce their holdings in this IPO include the Alagh couple themselves, along with Sofina Ventures SA, Evolvence, Fireside Ventures, Stellaris Venture Partners, Kunal Bahl (founder of Snapdeal), Bollywood actress Shilpa Shetty Kundra, Rishabh Harsh Mariwala, and Rohit Kumar Bansal. Sequoia Capital has opted not to engage in the Offer-for-Sale (OFS).

Business Expansion

Honasa Consumer's journey began with a focus on direct-to-consumer retailing, and they subsequently expanded to online marketplaces. Now, the company is strategically working to increase its presence in the offline market, they are also collaborating with local partners to facilitate Mamaearth's international expansion into countries like Bangladesh, Malaysia, Vietnam, and Thailand.

Ownership Structure

As of now, the co-founding husband-wife duo collectively owns 43.54% of the company's stake. Another major shareholder is owned by XV Partners (formerly Sequoia Capital), which possesses 20.94%. Fireside Ventures and Stellaris own 15.01% and 11.24%, respectively, and Peak XV Partners will not be partaking in the OFS.

In a statement from March, Honasa's CEO, Varun Alagh, confirmed that the company's largest investor, Sequoia Capital (rebranded as Peak XV Partners in July), would not be selling any shares in the IPO. This means the founders are expected to own more than 97% of their shares post IPO.

Honasa Consumer IPO Tentative Timeline

Investors must keep in mind these important dates when applying for an IPO.

IPO Allocation:

Financial Performances

This table provides a concise overview of key financial metrics over the past three fiscal years, showcasing the company's performance

Watch Mama Earth's Parent Company to Launch ₹1700 Cr IPO on 31-Oct-2023

Final Words

Honasa Consumer's journey from inception to achieving unicorn status showcases the tremendous growth in the direct-to-consumer space. With the impending IPO, the company aims to fuel further expansion and innovation, setting the stage for an exciting future in the Indian consumer segment.