Honasa Consumer Ltd, the parent firm of D2C brands such as Mamaearth, The Derma Co, and BBlunt, is set to launch its initial public offering (IPO) on October 31, according to the company’s red herring prospectus (RHP) filed with the Securities and Exchange Board of India (SEBI).
The firm will make a pre-IPO placement on October 30 while the public issue will close on November 2. According to the RHP, MamaEarth plans to issue fresh shares worth Rs 365 crore along with an offer for sale (OFS) of 41.25 million shares. The amount of fresh proceeds is lower than Rs 400 crore proposed in the company’s DRHP filed in December last year.
MamaEarth co-founders Varun Alagh and Ghazal Alagh will sell part of their stakes in the firm whereas early backers including Fireside Ventures, Stellaris Venture Partners, Sofina will sell 7.97 million, 9.56 million and 10.94 million shares during the initial public offer. On the other hand, Snapdeal founders Kunal Bahl and Rohit Bansal, and investor cum brand ambassador Shilpa Shetty Kundra will also participate in the OFS.
Peak XV Partners (formerly Sequoia Capital) will not join the OFS, as per the RHP. Interestingly, Evolvence India, which was willing to participate in OFS, has also pulled itself this time.
Peak XV is the largest external shareholder with 23.89% followed by Fireside and Stellaris which own 10.34% and 9.45%, respectively, in the company. Its co-founders Varun and Ghazal Alagh collectively command around 37.35% stake.
Kotak Mahindra Bank, Citigroup, JM Financials and JP Morgan would be the booking running lead managers, according to the RHP.
For the fiscal year ending on March 31, 2023, Honasa’s revenue from operations grew 58.3% to Rs 1,493 crore in FY23 from Rs 943 crore in FY22. The firm’s profits dwindled by 71.4% to Rs 4 crore in FY23 from Rs 14 crore in FY22. It’s worth noting that we have excluded the exceptional item of Rs 154.6 crore towards the impairment loss on goodwill and other intangible assets while calculating profits. Else, this will translate into net loss of Rs 151 crore for the company.
The company also revealed its quarterly results for Q1 FY24 during which it registered Rs 464.49 crore in revenue from operations.