Mamaearth IPO, Honasa Consumer Gains $92M Anchor Investments

Gurugram-based Honasa Consumer Ltd., the parent company of popular direct-to-consumer (D2C) brands, including Mamaearth, The Derma Co, and BBlunt, will launch its Initial Public Offering (IPO) on October 31, 2023.

The company, which built a ‘House of Brands’ architecture under the leadership of co-founders Ghazal Alagh and Varun Alagh, has garnered substantial investor interest, securing $92 million from anchor investors ahead of the IPO.

The company’s IPO, open for subscription till November 2, comprises a fresh issue of equity shares worth $49 million and an Offer for Sale (OFS) component of 41.25 million equity shares by promoters and early backers.

Notable investors participating in the OFS include Fireside Ventures, Stellaris Venture Partners, Sofina, Kunal Bahl, Rohit Kumar Bansal, and Bollywood actor Shilpa Shetty Kundra.

Financial Overview

For the fiscal year ending March 31, 2023, Honasa Consumer reported robust revenue growth, reaching $202 million, marking a 58.3 percent increase from the previous fiscal year. Despite a reported profit of $3 million in Q1 FY24, down from $18 million in the same period last year, the company’s performance remained strong.

However, the profit figure excludes exceptional items, indicating a positive trajectory for the company.

The funds raised through the IPO will go for various strategic purposes, including advertising expenses to enhance brand visibility, new exclusive brand outlets, investments in subsidiary BBlunt for salon expansions, general corporate initiatives, and potential inorganic acquisitions.

Honasa Consumer attracted a diverse range of anchor investors, including Smallcap World Fund Inc, Fidelity International, and Abu Dhabi Investment Authority, underscoring the global interest in the company’s growth prospects.

Co-founders Varun Alagh and Ghazal Alagh, who collectively hold around 37.35 percent stake, will divest a portion of their shares and participate from other key stakeholders like Fireside Ventures and Stellaris Venture Partners.

Market Outlook and Way Forward

With solid financials and a diverse portfolio of successful brands, Honasa Consumer’s IPO will significantly impact the market.

The company’s strategic initiatives, coupled with the investor confidence evident from the anchor investments, indicate a positive trajectory for the D2C conglomerate. As the global market watches, Honasa Consumer’s IPO sets the stage for an exciting chapter in the company’s journey.

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