The skincare and wellness industry has evolved in the past few years, and Mamaearth has been a forerunner. Honasa Consumer Ltd., the parent company of this direct-to-consumer (DTC) brand, is launching its IPO on the last day of October. This IPO will have a fresh issue and an Offer for sale (OFS).
Apart from Mamaearth, Honasa Consumer Ltd. has other brands under its umbrella. Such as The Derma, BBlunt, Dr. Sheth’s, Ayuga, Momspresso, and Aqualogica. So, if you are interested in investing in this FMCG brand, here are the details you must know.
Honasa Consumer Limited IPO Date, Lot Size & More
The IPO will have a Fresh issue of equity shares summing up to Rs. 4000 million and OFS of up to 46819635 equity shares. The price band for the total issue has been fixed with a price band of Rs. 308 to Rs. 324.
The entrepreneur-couple running the company, Varun and Ghazal Alagh, are the promoters selling shareholders selling up to 3186300 and 100000 equity shares, respectively. However, the investors selling shareholders Sofina, offering up to 19133948 equity shares, are offloading the highest number.
| IPO Status | Approved |
| IPO Date | 31 October 2023 – 2 November 2023 |
| Issue Price Band | Rs. 308 – Rs. 324 |
| Lot Size | 46 shares |
| Fresh issue | Rs. 365 cr |
| OFS | 1336 cr |
| Issue Type | Book Built Issue |
| IPO listing at | NSE & BSE |
| Face Value | Rs. 10 |
| QIB | 75% |
| Retail | 10% |
| Non-Institutional | 15% |
Honasa Consumer Limited IPO SWOT Analysis
Strengths
- Natural and eco-friendly products: One of the company’s primary strengths is its commitment to eco-friendliness. Most products are made from natural ingredients such as vegetables, herbs, fruits, and other natural resources.
- Digital First Approach: The famous brand Mamaearth of Honasa Consumers Ltd. has started selling its products online. It is still a digital-first Company, with most of its sales coming from online portals. Likewise, the other companies under the parent company primarily offer their products and services online.
- Consumer-centric Innovative products: The products Honasa Consumers offers are all made keeping in mind the needs and preferences of the clients.
- Brand Building: As consumers are more awakened these days, brand building requires quality products and wise choices, and Honasa Consumer Ltd. knows that well. Its flagship brand, Mamaearth, has become the fastest-growing brand in the BPC sector in the country, with over Rs. 10 billion in annual turnover.
Weaknesses
- Limited offline reach: While the company has a digital-first approach and has reached millions of customers in India, the growth can be stagnant without an offline presence.
- Higher price bands: The price range of the products is slightly higher, which doesn’t appeal to many segments of the population in the country.
Risks
- Excessive dependency on online marketing: The Company depends on online marketing, influencers, and celebrities. This extreme dependency can be a risk to its reputation and brand value.
- Highly competitive segment: The flagship brands like Mamaearth of Honasa must have garnered immense popularity. However, the competition in the personal care and wellness segment is fierce, which is why the other company brands are yet to grow.
Opportunities
Rising income: As the income levels are increasing, especially for middle-class and upper-middle-class households, they are spending on quality wellness and healthcare products.
Digitalization: With the rise of digitization, the company’s products are becoming readily available to every corner of the country. Moreover, the increasing influence of social media is another factor driving the demand.
What will Honasa Consumer Limited do with IPO Money?
As the IPO is a mix of OFS and fresh issues, the company will not receive the proceeds from OFS. It is entitled to the selling shareholders after deducting expenses and taxes related to the offer.
The proceeds from the fresh issue shall be mainly used for –
• Building brand presence through advertisement
• Setting up new EBOs – this will be a capital expenditure
• Setting up new salons for BBlunt or Bhabani Blunt Hairdressing Pvt. Ltd., the subsidiary of Honasa Consumer Ltd.
Honasa Consumer Limited: Overview of the Company
In 2016, Mamaearth was first launched, which is the primary business of Honasa Consumer Ltd. Post that, all the other six subsidiaries were established, with a primary focus on personal care products.
The company offers products in all these segments – Face care, Body care, Hair care, Baby care, Colour cosmetics, and Fragrances. The use of all-natural products and the direct-to-consumer approach of the company has made it stand out from the rest. To understand the business better, check the video below.
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I’m Archana R. Chettiar, an experienced content creator with
an affinity for writing on personal finance and other financial content. I
love to write on equity investing, retirement, managing money, and more.