Everything you need to know about Honasa Consumer Limited (Mamaearth) IPO

7 years old. ₹1,500 crores in revenues. A bottom line in the black. And on the verge of a massive IPO. That’s the Mamaearth story.

Or rather, that’s the story of Honasa Consumer Ltd. See, Mamaearth is just a brand. The company is named Honasa Consumer and it’s building a “House of Brands” ecosystem to capture India’s burgeoning Beauty and Personal Care (BPC) industry. For Honasa, there’s Derma and Dr Sheth’s which they say is the kind of skincare product that will be prescribed by dermatologists. They have Aqualogica. They have Ayuga for the ones who prefer Ayurveda. And of course, the flagship Mamaearth Brand.

But can Honasa Consumer take on the might of incumbent rivals like HUL who don’t want to cede ground in the BPC industry? What’s Honasa’s strength that could help it scale newer heights? And is the IPO pricing really attractive for retail investors?

You can read this story by Finshots to learn more about Honasa Consumer (Mamaearth) and its IPO here.

More information about the company

India’s retail industry is huge and expanding quickly; it is predicted to reach a value of over US$1.4 trillion by 2026. This growth is particularly noticeable in the beauty and personal care (BPC) sector, where around half of the market is anticipated to be organized by that time. Being a large, rapidly expanding BPC company that prioritizes digitalization, Honasa is in a unique position. It is positioned uniquely as a large, rapidly expanding BPC house of brands that prioritizes digital media.

Honasa’s primary goal is to create products that address the beauty and personal care concerns of consumers. Their flagship brand, Mamaearth, focuses on providing safe and natural products, particularly toxin-free beauty items made from natural ingredients. Honasa ranked second amongst the digital-first BPC companies in India in terms of gross profit margins in the Financial Year 2022, and it was one of the two digital-first BPC companies in India with a positive adjusted EBITDA margin and share-based payment expenses (cash settled) in the Financial Year 2021.

As of September 30, 2022, Mamaearth had become the fastest-growing Beauty and Personal Care (BPC) brand in India, achieving an annual revenue of ₹10 billion in the preceding 12 months, within six years of its launch. Since introducing Mamaearth in 2016, Honasa has expanded its portfolio with five new house of brands: The Derma Co., Aqualogica, Ayuga, BBlunt, and Dr. Sheth’s. As of September 30, 2022, their range of brands offers various products in baby care, face care, body care, hair care, and color cosmetics and fragrance segments.

Mamaearth is the largest brand in the DTC BPC market in India in terms of revenue generated from the DTC channel in the Financial Year 2022.

They have a market share of 5.3% in the online BPC market.

Mamaearth was India’s most-searched BPC brand on Google Trends between January 2020 and November 2022.

Mamaearth was ranked among the top three in terms of awareness in the grooming category on Flipkart between May 2021 and November 2022.

They were ranked second amongst digital-first BPC companies in India in terms of gross profit margins in the financial year 2021.

What is the issue size of the Honasa Consumers IPO?

The entire public offer of the company is an offer for sale (OFS) of up to 4.12 crore equity shares by the selling shareholders and a fresh issue of equity shares aggregating up to Rs 365 crores.

Financials of Honasa Consumers (₹ crores)

As at and for the period ended Total assets of subsidiaries Total revenue of subsidiaries Net cash flow of subsidiaries
March 31, 2022 67.515 11.909 (1.165)
September 30, 2022 96.385 45.117 4.217

Revenue break-up (₹ crores)

Particulars As of March 31, 2022 As of March 31, 2021 As of March 31, 2020
Revenue growth 105.11% 319.00% NA
Gross Profit 660.026 327.284 73.007
EBITDA 11.459 (1334.033) (431.714)

Risk factors to consider:

  • They derive a significant amount of revenue from a limited number of products. Any decrease in the sales of key products will adversely affect the business, cash flows, financial condition, and results of operations.
  • Reliance on celebrities and social media influencers as part of their marketing strategy may adversely affect the business and demand for services.
  • The inability to effectively manage or expand their offline sales network may have an adverse effect on the business, results of operations, cash flows and financial condition.
  • They rely on relationships with certain marketplaces and web traffic drivers for sales through online channels. Any interruptions or delays in service on their websites or mobile applications, or any undetected errors or design faults, could result in limited capacity, reduced demand, processing delays, and loss of consumers, suppliers, or sellers.
  • They are dependent on several third-party service providers to sell or distribute their products to consumers and on third-party technology providers for certain aspects of their operations. Any disruptions or inefficiencies in these operations may adversely affect their business, financial condition, cash flows, and results of operations.
  • They’ve experienced negative cash flows from operating, investing, and financing activities in the past. They have recorded losses in the past. And any losses in the future may also adversely impact the business and the value of the equity shares and may require additional financing in the form of debt or equity to meet the business requirements.
  • There is outstanding litigation pending against them and their subsidiaries, which, if determined adversely, could affect the business, results of operations, cash flows, and financial condition.

Schedule of Honasa Consumer Limited IPO

Issue Period 31st October to 2nd November 2023
Price band ₹ 308 - 324
Minimum Bid quantity 46 & Multiples thereof
Deadline for accepting UPI mandate Until 5 PM on the issue closing day
Finalization of Allotment 7th November 2023
Initiation of Refunds 8th November 2023
Credit of Shares 9th November 2023
Date of Listing 10th November 2023
Mandate end date 17th November 2023
Anchor Investors Lock-In End Date 2nd December 2023

How to apply to the Honasa Consumer Limited IPO?

You can apply for the Honasa Consumer Limited IPO using any supported UPI app by following two steps:

  • Enter your bid on Kite
  • Accept the UPI mandate on your phone

On acceptance of the mandate, the bid amount will get blocked in your bank account. Click here to learn more.

How to check the allotment status for Honasa Consumer Limited IPO?

You can check the allotment status for the Honasa Consumer Limited IPO on the website of the Registrar and Transfer agent. Alternatively, you can also check the allotment status on the NSE website.


is it a fmcg company or marketing company? lulzzz

I am always skeptical of companies turning a small profit (So that headline can read as “Profit-making” company) just before an IPO.
This is either a financial jugglery or company cutting down marketing spend for some time so that numbers look good.

Frankly, this IPO is daylight robbery and I hope retail investors don’t fall for it.

Also, @Meher_Smaran I see that no mention of valuation (EPS or P/E) in “Everything to know about IPO”.
Seems like nobody worries about valuation in an IPO these days :rage:

OFS portion is 4.12 crores shares.

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Hey @Akash_Shah

I remember we had this discussion about valuations. :smiley: And, no we didn’t forget about valuations at all.

Last couple of months have been super hectic with many IPOs and most of the IPOs either don’t share data relevant to peer comparison or even if they do it was bit vague, so due to the lack of uniformity across all IPOs, we decided to omit that valuations portion temporarily and only shared assets, revenue, P&L and EPS data

But, we are working on this and soon, come up with better content.

Thanks for the honest feedback as always :slight_smile:

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Yes, that is precisely the game they are playing.
Talk about rosy things like India economy, retail industry, trillions of dollars of market and all other rosy things, so that investors do not think about looking at valuation :slight_smile:

Though you say EPS data, I don’t see EPS data included anywhere in your long post.
And if you have EPS data, I am not sure why it would be difficult to add at least P/E as basic valuation number.

Companies want to fool investors, so they will try to hoodwink data as far as possible. We expect better from Zerodha.


Another feedback @Meher_Smaran while I really appreciate you guys for sharing such data, I believe Net profits and net profit margins and cash profits are a lot more valuable metrics over EBITDA and Gross margins.
Can you provide such data over the upcoming IPOs or it’s out of your hands?
I totally agree with you @Akash_Shah not just with this one but a lot of IPOs with very vague data and comparison metrics feel like this… Are the IPO markets turning into a Pump and dumps?

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You can find the list of mutual funds that have invested in this IPO.

Safe to say, these guys are just playing with public’s money

PE: 2600 (LOL) ; Promoter getting 103cr from IPO(selling his share- his retirement fund) . While company raising 300cr which will be used for marketing rest VCs getting exit . Majority of anchors are mutual funds so this party is indirectly funded by retailers.

USP of FMCG brand is ‘Marketing’ . we are living in funny world .

Open loot , i don’t know how SEBI allowed the IPO to float.

if its listed than its would make this company highest PE in whole India( probably the world) . PE=2600 Insane…

The IPO is 8 times oversubscribed… I feel sad when I see companies like this getting listed and poor retail investors losing their hard-earned money by subscribing to such IPOs.

Promotors have become billionaires…they have played their shot successfully

Yeah, subscription was overwhelming. Kudos to promoters to pull it off. Market is supreme.

Don’t be sad.
Well you cant save evry fool who wants to loose their money.
If you save them here they will end up loosing in some Crypto scheme or MLM scheme or something else.
there is only so much one can do

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I’d rather not be in a rush to buy this.

It’s not a once in decade opportunity that’s not gonna be there.

Better to wait and watch.