HONASA CONSUMER LIMITED FILES DRHP WITH SEBI
Owner of popular brand ‘Mamaearth’, Honasa Consumer Limited (‘The Company’), also India’s largest digital-first beauty and personal care (‘BPC’) company in terms of revenue from operations for the Financial Year 2022 (Source: RedSeer Report), has filed its Draft Red Herring Prospectus (‘DRHP‘) with market regulator Securities and Exchange Board of India (‘SEBI‘).
The Company plans to raise funds through offer of equity shares (face value ₹ 10 each) through initial public offerings. The offer comprises of fresh issue of equity shares aggregating up to ₹ 400 crore (The ‘Fresh Issue‘) and offer for sale up to 46,819,635 equity share by Selling Shareholders (The ‘Offer for Sale‘)
The company proposes to utilize net proceeds from fresh issue towards – (i) Advertisement expenses towards enhancing the awareness and visibility of its brands amounting to ₹ 186 core; (ii) Capital expenditure to be incurred by Company for setting up new EBOs amounting to ₹ 34.23 crore; and (iii) Investment in its Subsidiary, Bhabani Blunt Hairdressing Private Limited (‘BBlunt’) for setting up new salons amounting to ₹ 27.52 crore; and General corporate purposes and unidentified inorganic acquisition.
The Offer for Sale comprises of – Up to 3,186,300 equity shares by Varun Alagh and Up to 100,000 equity shares by Ghazal Alagh (The ‘Promoter Selling Shareholders‘); Up to 220,613 equity shares by Evolvence India Coinvest PCC invested through its Cell E, Up to 862,987 equity shares by Evolvence India Fund III Ltd, Up to 7,972,478 equity shares by Fireside Ventures Investment Fund –I, Up to 19,133,948 equity shares by Sofina Ventures S.A. and Up to 12,755,965 equity shares by Stellaris Venture Partners India I (The ‘Investor Selling Shareholders’); Up to 777,672 equity shares by Kunal Bahl, Up to 477,300 equity shares by RIshabh Harsh Mariwala, Up to 777,672 equity shares by Rohit Kumar Bansal and Other Selling Shareholders.
The Equity Shares that will be offered through the Red Herring Prospectus are proposed to be listed on the BSE Limited (‘BSE’) and National Stock Exchange of India Limited (‘NSE’).
Kotak Mahindra Capital Company Limited, Citigroup Global Markets India Private Limited, JM Financial Limited and J.P. Morgan India Private Limited are the Book Running Lead Managers to the issue.
About The Company: Since its inception, Honasa Consumer Limited has worked with the primary objective of developing products that address beauty and personal care problems faced by consumers. For instance, its flagship brand, Mamaearth, is built to service a core customer need for safe-to-use, natural products, and focuses on developing toxin-free beauty products made with natural ingredients.
The company has added five new brands to its portfolio, namely The Derma Co., Aqualogica, Ayuga, BBlunt and Dr. Sheth’s, and have built a ‘House of Brands’ architecture since launching Mamaearth in 2016. As of September 30, 2022, Honasa Consumer portfolio of brands with differentiated value propositions includes products in the baby care, face care, body care, hair care, color cosmetics and fragrances segments.
According to RedSeer Report, (i) The Company had grown its revenue from operations at a CAGR of 193.15% between Financial Years 2020 and 2022 (from ₹1,097.84 million in Financial Year 2020 to ₹9,434.65 million in Financial Year 2022), while the median revenue CAGR of all other beauty and personal care companies for which data was available for the relevant period was 13%; (2) As of September 30, 2022, Mamaearth has emerged as the fastest growing BPC brand in India to reach an annual revenue of ₹ 10 billion (in the preceding 12 months) within six years of launch; (3) The company had a market share of 5.3% in the online BPC market (i.e. DTC and eTailing) in India in calendar year 2021 and a market share of 26.4% in the DTC BPC market in 2021; (4) Mamaearth was India’s most-searched BPC brand on Google Trends between January 2020 and November 2022 and was ranked amongst the top three in terms of awareness in the grooming category on Flipkart between May 2021 and November 2022.
Honasa Consumer has a dedicated in-house innovation team, consisting of 45 members, as on September 30, 2022, that drives end-to-end ideation and execution of new products launches. It makes products available to our customers through omni-channel distribution networks across both online and offline touchpoints. Moreover, it actively leverage insights on consumer preference from DTC channel at a pin-code level to define offline store expansion strategy and merchandising and portfolio rationalization strategy. It established scale across both online and offline channels and recorded the highest revenue from offline channels among digital-first BPC companies in India in Financial Year 2022 (Source: RedSeer Report).