SUMMARY
Mamaearth IPO will consist of a fresh issue of shares worth INR 400 Cr, while the OFS will consist of 46.82 Mn equity shares
Sofina is selling the most stake in the company, selling up to 19.13 Mn equity shares in the IPO
Interestingly, Sequoia Capital is not participating in the OFS, even though it holds nearly a 20% stake in Mamaearth
Honasa Consumer Limited, the parent company of D2C brands Mamaearth, BBlunt and The Derma Co, has filed the draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an initial public offer (IPO).
The Mamaearth IPO will consist of a fresh issue of shares worth INR 400 Cr, while the offer for shares (OFS) will consist of 46.82 Mn equity shares being diluted by a handful of investors in the D2C startup.
The development comes a month and a half after Mamaearth converted into a public company in preparation for the IPO. According to its regulatory filings, the parent company of Mamaearth changed its name from Honasa Consumer Private Limited to Honasa Consumer Limited in November 2022.
Honasa will see investors including the founders, Ghazal and Varun Alagh, 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 dilute their holdings during the IPO.
Among the institutional investors, Sofina is selling the most stake in the company, selling up to 19.13 Mn equity shares in the IPO. On the date of the DRHP, Sofina holds a 9.49% stake in the D2C brand.
Interestingly, Sequoia Capital is not participating in the OFS, even though it holds nearly a 20% stake in Mamaearth.
According to the draft documents, the Mamaearth parent will be using the net proceeds of the IPO for advertisement expenses to improve brand visibility and awareness. Further, the IPO funds will be used to set up new exclusive brand outlets, set up new salons for BBlunt, general corporate purposes and inorganic growth via acquisitions.
Incidentally, Mamaearth also turned profitable in FY22, reporting a net profit of INR 19.8 Cr on a standalone basis in FY22 as against a net loss of INR 1,332.2 Cr in FY21.
At the same time, the Gurugram-based D2C brand saw its income rise 101% to INR 952.4 Cr in FY22 from INR 472.1 Cr in the previous financial year. Ahead of the IPO, Mamaearth saw its revenue from operations almost double to reach INR 931.7 Cr from INR 459.9 Cr in FY21.
Mamaearth’s expenses narrowed 48.5% to INR 924 Cr in FY22 from INR 1,796.7 Cr in FY21, becoming one of the few D2C brands to cut its expenses in the fiscal year.
