According reports, Direct-to-consumer (D2C) beauty and personal care brand Mamaearth, which is owned by Honasa Consumer, is set to launch its IPO on 31 October 2023.
The D2C startup had submitted a Draft Red Herring Prospectus to the Securities and Exchange Board of India (SEBI) on 28 December 2022. As per the report, the anchor portion of the IPO is scheduled to open on October 30. Currently, the startup has not been planning for a pre-IPO funding round.
With public listing, it aims to raise about Rs 1,700 crore through a combination of a fresh issue and an offer-for-sale, targeting an estimated valuation of around Rs 10,500 crore.
The offering will consist of a fresh issue of shares valued at Rs 400 crore and an offer for sale of up to 46,819,635 equity shares, as outlined in the company’s draft prospectus.
Moreover, the proceeds from the fresh issue will be invested in bolstering marketing efforts to enhance brand visibility, establishing new exclusive brand outlets, and expanding the network of BBlunt salons.
According to the Draft Red Herring Prospectus (DRHP), shareholders looking to reduce their holdings include the Alaghs, Sofina Ventures SA, Evolvence, Fireside Ventures, Stellaris Venture Partners, Snapdeal founder Kunal Bahl, Bollywood actress Shilpa Shetty Kundra, Rishabh Harsh Mariwala and Rohit Kumar Bansal. Notably, Sequoia Capital is not participating in the offer for sale.
Founded in 2016 by the husband-wife duo of Varun and Ghazal Alagh, Honasa runs brands like Mamaearth, The Derma Co., Aqualogica and Ayuga and acquired stakes in BBlunt and Dr. Sheths
Mamaearth posted a net profit of Rs 19.8 crore in FY22. It recorded a net loss of Rs 1,332.2 crore in FY21. This turnaround was attributed to increased customer repeat rates and the expansion of sales channels, both online and offline.
Tiger Global-backed startup is close to achieving a revenue milestone of Rs 1,000 crore in the fiscal year of 2022. Its total income increased significantly by 101 per cent, reaching Rs 952.4 crore compared to Rs 472.1 crore in the previous year. The revenue from operations also doubled, reaching Rs 931.7 crore from Rs 459.9 crore in FY21.
Another notable development is Mamaearth’s achievement of unicorn status through a fundraising round in December 2022. Led by VC firm Peak XV, the round secured USD 52 million and valued it at USD 1.2 billion.
While Mamaearth primarily operates as an ecommerce giant, selling products through various channels, including more than 100,000 FMCG retail outlets in India, it faces competition from other players in the beauty ecommerce landscape such as Nykaa, Purplle, SUGAR, Wow Skin Science and others.
It’s important to mention that the period between 2022 and 2023 has seen a slowdown in IPO activity due to market volatility. Additionally, Honasa, the parent company of Mamaearth, is currently involved in multiple litigations. According to the DRHP (Draft Red Herring Prospectus), the IPO-bound company and its subsidiaries are engaged in four criminal and civil litigations against different individuals.
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