Mamaearth parent company, Honasa, files IPO papers with SEBI

The Alaghs, 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 to sell their stake

FPJ Web DeskUpdated: Thursday, December 29, 2022, 12:27 PM IST
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Mamaearth parent company, Honasa, files IPO papers with SEBI | Image credit: Mamaearth (Representative)

The parent company of brands like Mamaearth, The Derma Co, and BBlunt, Honasa Consumer Private Ltd, the first unicorn of 2022, has submitted draft papers to the SEBI for listing in order to generate money through a mix of a fresh issue and an offer-for-sale.

The husband-and-wife team of Varun and Ghazal Alagh (of "Shark Tank" fame), who are active in the beauty, babycare, and skincare sectors, co-founded the quickly expanding D2C (direct to consumer) company in 2016.

It attained the unicorn status when it raised $52 million at a valuation of $1.2 billion in a fundraising round in January led by top VC firm Sequoia Capital.

Red herring prospectus

According to the company's draft red herring prospectus, the fresh issue size is up to Rs 400 crore, and the OFS component by a number of outside investors and individual shareholders is up to 46,819,635 equity shares.

The IPO

The major stockholders like the Alaghs, 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 will dilute their interests. Sequoia Capital is not participating in the OFS.

"The combined size of the IPO could range between Rs 2,400 crore and Rs 3,000 crore, though the exact quantum at the time of listing would depend on final valuations," said one of the persons cited above.

"The plan is to launch the deal in March next year, but that timeline is subject to market conditions," a person with knowledge of the matter told.

A third person elaborated that a combination of strong brand and product management and the right hybrid model had helped Honasa Consumer to scale up its business.

Net proceeds

The net proceeds of the IPO will be used for advertising expenses to improve brand visibility and awareness, setting up new exclusive brand outlets, investment in BBlunt for setting up new salons, general corporate purposes, and inorganic growth.

Mamaearth's filing with the market regulator follows one made in January by a competitor in the thriving D2C space—a boat backed by Warburg Pincus. The audio focused electronics brand hopes to raise about Rs 2,000 crore.

Investment banks working on the IPO include Kotak Mahindra Capital, JM Financial, Citi, and JP Morgan. Legal advisors are Cyril Amarchand Mangaldas, Indus Law, and Khaitan & Co.

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