Mamaearth IPO: What You Need to Know Before Investing

Honasa Consumer, the company behind the popular brand Mamaearth, filed it’s Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) on December 29, intending to generate approximately Rs 2,900 crore via an initial public offering (IPO). The business aims to raise capital through the public issuance of equity shares, each with a face value of Rs 10. The Mamaearth IPO comprises a fresh equity share offering valued at up to Rs 400 crore and an offer for sale (OFS) involving up to 46,819,635 equity shares by existing shareholders.

Mamaearth Product Portfolio

Honasa Consumer Ltd, the well-known beauty and personal care brand’s parent company, plans to initiate the Mamaearth IPO. The firm submitted it’s Draft Red Herring Prospectus (DRHP) to SEBI on December 30, 2022, for the IPO.

Established in 2016 by Varun and Ghazal Alagh, the Gurgaon-based Honasa Consumer began as a digital-first consumer brand. Its portfolio includes several brands, such as its flagship Mamaearth, BBLUNT, and Aqualogica, among others.

The Objectives of Mamaearth IPO

The company plans to allocate the net proceeds for various objectives, including prepayment or repayment of specific outstanding loans acquired by the company and one of its major subsidiaries, Avalon Technology and Services Private Limited (ATSPL). Furthermore, the funds will be utilised to finance the company’s working capital needs, securing sufficient resources for continuous operations and growth initiatives. Finally, the proceeds will also be designated for general corporate purposes.

About the IPO

The Mamaearth IPO has a reported valuation of Rs 24,000 crores, translating to nearly 25x FY22 revenues and 1600x FY22 profits (PE). These valuations are significantly higher than established brands like Marico or Dabur, which trade between 50x to 60x PE with legacy brands and extensive offline distribution. Additionally, there are concerns about IPOs where over 25% of the IPO sizes are committed to an offer-for-sale. In Mamaearth’s case, Rs 2,500 crores out of the Rs 2,900 crore IPO will provide liquidity to early investors and celebrity influencers, raising red flags primarily due to the exceptionally high valuation expectations for a company that recorded Rs 14 crores in profit for FY22.

Honasa Consumer, widely recognized by its flagship brand ‘Mamaearth’, is opening the 2023 IPO season with a Rs 2,400 crore offering (Rs 400 crore via fresh issue and the remaining via OFS component). Mamaearth’s IPO, also the first unicorn in 2022, signifies a growing trend of investments and acquisitions in the direct-to-consumer (DTC) startup space throughout 2022. This trend included transactions where several large FMCG players such as HUL, ITC, and Marico invested in DTC startups like OZiva, Mother Sparsh, and HW Wellness.

Financial Performance (In Crore)

Important Details

Promoters of the Company

In the Mamaearth IPO’s offer for sale (OFS), shares are being offered by promoters Varun Alagh and Ghazal Alagh, as well as investors such as Fireside Ventures Fund, Sofina, Stellaris, Kunal Bansal, Rohit Bansal, Rishabh Harsh Mariwala from the FMCG company Marico, and Bollywood star Shilpa Shetty Kundra.

How to Apply

Wait for the public issue to open for subscription, then click on this link to apply for the Mamaearth IPO with Bigul https://ipo.bonanzaonline.com/.

How to Check Allotment Status

The registrar for Mamaearth IPO is KFIN Technologies Limited To check your allotment status, please click on this link www.kfintech.com

FAQs

1. What is the Mamaearth IPO?
   The Mamaearth IPO is an initial public offering of equity shares by Honasa Consumer Ltd, the parent company of the popular beauty and personal care brand Mamaearth. The company aims to raise approximately Rs 2,900 crores through this IPO.
   
2. When is the Mamaearth IPO launch date?
   The exact Mamaearth IPO launch date has not been announced yet. Please stay tuned for updates.
   
3. What is the price band for the Mamaearth IPO?
   The price band for the Mamaearth IPO has not been revealed yet. Keep an eye on this space for updates.
   
4. What are the fresh issue sizes and offers for sale in the Mamaearth IPO?
   The fresh issue size in the Mamaearth IPO is Rs 400 crores. The offer for sale involves up to 46,819,635 equity shares by existing shareholders.
   
5. What is the face value of each share in the Mamaearth IPO?
   The face value of each share in the Mamaearth IPO is Rs 10.
   
6. On which stock exchanges will the Mamaearth IPO be listed?
   The Mamaearth IPO will be listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).
   
7. Who are the promoters offering shares in the Mamaearth IPO’s offer for sale?
   The promoters offering shares in the Mamaearth IPO’s offer for sale include Varun Alagh and Ghazal Alagh and investors such as Fireside Ventures Fund, Sofina, Stellaris, Kunal Bansal, Rohit Bansal, Rishabh Harsh Mariwala from FMCG company Marico, and Bollywood actress Shilpa Shetty Kundra.
   
8. How can I apply for the Mamaearth IPO?
   Once the public issue opens for subscription, you can apply for the Mamaearth IPO through the Bigul platform by visiting this link: https://ipo.bonanzaonline.com/.
   
9. How do I check the allotment status of the Mamaearth IPO?
   KFIN Technologies Limited is the registrar for the Mamaearth IPO. To check your allotment status, please visit their website at www.kfintech.com.
   
10. What are the financials of Mamaearth?

The financial performance of Mamaearth is as follows:

• FY 2020: Revenue – Rs 109.78 crores; Expenses – Rs 542.19 crores; Net income – (-Rs 428.02 crores); Margin – (-389.89%).
• FY 2021: Revenue – Rs 459.99 crores; Expenses – Rs 1,796.71 crores; Net income – (-Rs 1,332.22 crores); Margin – (-289.62%).
• FY 2022: Revenue – Rs 943.47 crores; Expenses – Rs 941.91 crores; Net income – Rs 14.44 crores; Margin – 1.53%.
• H1 FY 2023: Revenue – Rs 722.74 crores; Expenses – Rs 722.94 crores; Net income – Rs 3.67 crores; Margin – 0.51%.