Honasa Consumer Private Ltd, the parent company of brands such as Mamaearth, The Derma Co, and BBlunt, has filed review papers with the Securities and Exchange Commission for listing to raise capital through a combination of a new issue and an offer-for-sale.
Honasa’s initial public offering (IPO) in 2022 will consist of a new issue of shares worth approximately INR 400 crore.
Varun and Ghazal Alagh, a husband-and-wife team, co-founded the fast-growing D2C (direct-to-consumer) organization in 2016. It became a unicorn after raising $52 million at a capitalization of $1.2 billion in a January crowdfunding session directed by top venture capital firm Sequoia Capital.
According to the proposed red herring disclosure statement, the new issue size is INR 400 crore, with an OFS component of up to 46,819,635 ordinary shares by a team of external investors and personal shareholders.
Sofina, Stellaris, Kunal Bahl, Shilpa Shetty to sell stake
The Alaghs, Sofina Ventures SA, Evolvence, Fireside Ventures, Stellaris Venture Partners, and Snapdeal founder Kunal Bahl, among the shareholders who will liquidate their stakes, Bollywood actress Shilpa Shetty Kundra, Rishabh Harsh Mariwala, and Rohit Kumar Bansal. Sequoia Capital will not participate in the OFS.
The proceeds from the IPO sale will be used for advertising expenses to increase brand exposure and awareness, the establishment of new exclusive outlet stores, funding in BBlunt for the establishment of new salons, everyday business purposes, and inorganic growth.
Many internet-based businesses have struggled on the stock market this year due to central banks raising interest rates and investors avoiding new-age firms losing money. Due to this, startups like Snapdeal, Mobikwik, and Boat have delayed or shelved their initial public offerings.
To launch its IPO at this time, Mamaearth appears to have relied on its profitability. After posting losses of INR 1,332 crore in FY21 and INR 428 crore in FY20, the company turned a profit in FY22 with net earnings of INR 14 crore. The business reported a four-crore net profit for the first half of FY23.