Honasa Consumer IPO: Offering Begins October 31, Uncover the Company’s Strategy
Honasa Consumer IPO
The Honasa Consumer IPO, the highly anticipated offering from the parent company of popular brand Mamaearth, is set to open for subscription on October 31.
This public offering is generating significant buzz in the financial world, as Honasa Consumer has gained recognition for its innovative approach to the beauty and personal care (BPC) industry.
In this in-depth exploration, we’ll delve into the details of this upcoming IPO, including its size, price band, subscription period, and usage of funds.
We will also analyze Honasa Consumer’s financial performance, its market position, and the key stakeholders involved in this milestone event.
IPO Basics
The Honasa Consumer IPO is scheduled to open for subscription on October 31, offering investors an opportunity to become part of this promising venture.
While the price band for this issue has not yet been disclosed, it’s expected to be announced in the coming days.
Investors will have the opportunity to invest in the IPO until November 2, providing a window for both institutional and retail investors to participate. Notably, the issue will be opened for anchor investors on October 30, a day ahead of the public offering.
IPO Size and Structure
The Honasa Consumer IPO comprises the issuance of fresh equity shares valued at Rs 365 crore. In addition to this, there will be an Offer for Sale (OFS) of 4.12 crore equity shares by promoters and investors.
This dual approach allows the company to raise capital for its expansion and other corporate purposes while also providing an exit route for early investors and promoters.
Market experts have suggested that if the total issue size is indeed around Rs 1700 crore, the OFS size could be approximately Rs 1335 crore. The final figures will be confirmed once the IPO details are released.
Selling Shareholders
The Offer for Sale (OFS) includes several prominent selling shareholders, adding a layer of diversity to the investor base. These selling shareholders include:
- Varun Alagh
- Ghazal Alagh
- Fireside Ventures Fund
- Sofina
- Stellaris
- Kunal Bahl
- Rishabh Harsh Mariwala
- Rohit Kumar Bansal
- Shilpa Shetty Kundra
This range of stakeholders participating in the OFS demonstrates the broad interest and support that the company has garnered.
Market Landscape
Honasa Consumer operates in the ever-growing beauty and personal care (BPC) industry. With a portfolio of brands that includes Mamaearth, The Derma Company, Aqualogica, Ayuga, and Beeblunt, the company has positioned itself as the largest digital-first BPC company in India based on revenue for FY23.
Its impressive market share in the Direct-to-Consumer (DTC) BPC market in calendar year 2022 stood at approximately 28.9 percent, a testament to its strong market presence and consumer appeal.
Financial Performance
A crucial aspect of evaluating any IPO is the company’s financial performance. Honasa Consumer has made significant strides in this regard.
In the June quarter of FY24, the company reported a net profit of Rs 25.96 crore, a remarkable turnaround from a loss of Rs 9.3 crore in the corresponding period of the previous financial year.
This substantial improvement is indicative of the company’s strategic initiatives and effective cost management.
Furthermore, during the same period, Honasa Consumer saw its revenue from operations surge by an impressive 49 percent, reaching Rs 464.5 crore.
This robust revenue growth underscores the company’s ability to capture market demand and capitalize on its diverse portfolio of brands.
IPO Timeline
After the subscription period concludes, the company plans to allot shares to successful investors until November 7. Equity shares are expected to be credited to the demat accounts of these investors by November 9.
According to the IPO schedule, the official listing of its equity shares is slated for November 10 on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
The T+6 timeline for the listing ensures that the IPO proceeds are efficiently deployed, contributing to the liquidity of the shares.
Key Stakeholders and Advisors
Several prominent financial institutions and service providers are involved in the Honasa Consumer IPO. The merchant bankers for the offering include:
- Kotak Mahindra Capital Company
- Citigroup Global Markets India
- JM Financial
- JP Morgan India
These trusted institutions are responsible for overseeing the IPO process, ensuring compliance with regulations, and helping the company maximize its fundraising potential.
In addition to the merchant bankers, Kfin Technologies has been appointed as the registrar to the offer, managing the administrative aspects of the IPO, such as share allotment and investor inquiries.
Usage of IPO Funds
One of the critical aspects of any IPO is understanding how the raised funds will be utilized. Honasa Consumer has outlined its plans for the allocation of the IPO proceeds, which reflects a mix of strategic investments and corporate expansion:
- Advertising Expenses: The company will allocate Rs 182 crore from the IPO funds to boost its advertising and marketing efforts. This investment is crucial for brand visibility and customer engagement.
- Setting up Exclusive Brand Outlets (EBOs): Honasa Consumer is earmarking Rs 20.6 crore to establish new Exclusive Brand Outlets, which provide a direct sales channel for its products. This investment will help expand the company’s retail presence and strengthen its brand presence.
- Investment in Subsidiary: An allocation of Rs 26 crore is dedicated to subsidiary company Bhabani Blunt Hairdressing (BBlunt) to set up new salons. This expansion strategy aligns with the company’s growth plans within the beauty and personal care sector.
- General Corporate Purposes: A portion of the IPO funds will be reserved for general corporate purposes, which provides flexibility for the company to manage various operational needs.
- Inorganic Acquisitions: Honasa Consumer has indicated that some funds will be set aside for undisclosed inorganic acquisitions. This signals the company’s intent to explore opportunities for expansion and diversification.
Promoters and Public Ownership
As for ownership structure, the promoters currently hold a 37.41 percent stake in the company, demonstrating their commitment to its growth and success.
The remaining shares are held by the public, which includes investors associated with Fireside Ventures Fund, PXV VI, Stellaris, Sofina, and Sequoia Capital.
This distribution of ownership indicates a well-balanced structure, offering both insider and outsider perspectives to guide the company’s future direction.
Final Thoughts
The Honasa Consumer IPO presents an exciting opportunity for investors to be part of a company that has made significant strides in the digital-first beauty and personal care (BPC) sector.
With a diverse portfolio of brands, strong financial performance, and a strategic approach to market expansion, Honasa Consumer has captured attention in a competitive industry.
Investors, both institutional and retail, will be closely watching the developments related to this IPO.
The pricing, subscription levels, and overall market sentiment will play a crucial role in determining the success of the offering. As the IPO proceeds and shares are allocated, the company’s performance post-listing will be closely monitored.
The beauty and personal care industry in India is poised for continued growth, and Honasa Consumer’s innovative approach, strong brand portfolio, and robust financial performance position it favorably for future success.
As the IPO journey unfolds, the company’s impact on the market and its ability to deliver on its strategic objectives will be closely observed by investors, industry experts, and the financial community at large.
