Honasa Consumer Limited (Mamaearth) IPO

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i. Mamaearth is the largest digital-first beauty and personal care (“BPC”) company in India in terms of revenue from operations for the Financial Year 2022. Since its inception, they have worked with the primary objective of developing products that address beauty and personal care problems faced by consumers. For instance, their 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. 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.

ii. Since launching Mamaearth in 2016, 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. As of September 30, 2022, the portfolio of brands with differentiated value propositions includes products in the baby care, face care, body care, hair care, color cosmetics and fragrances segments.

iii. The graphic below provides a brief overview of the brands:

iv. Additionally, the company continuously seek to connect better with its consumers and strengthen its brand equity by building ‘purposedriven’ brands that are associated with environmental and social impact causes. For instance, through the Mamaearth ‘Plant Goodness’ initiative, they work with a non-government organisation to plant trees for orders placed on its direct-to-consumer (“DTC”) platform and share geo-tagged images of these trees with the consumers. Similarly, The Derma Co. is associated with a ‘Young Scientists’ program wherein children in certain rural parts of India are provided with access to education in science, and Aqualogica is associated with a ‘Fresh Water for All’ initiative wherein they help enable access to clean drinking water for marginalized communities.

v. They make their products available to their customers through omni-channel distribution networks across both online and offline touchpoints. They strategically leverage its presence on online channels (both DTC platforms and e-commerce marketplaces) during the early stages of a brand or products lifecycle to generate trials amongst early adopters, engage with consumers directly and test for product market fit. Once a product or brand reaches a mature stage, they selectively introduce such products and brands in offline stores to drive penetration amongst a larger consumer base.

vi. Their sharp focus on the BPC category coupled with the strengths in brand building, innovation, distribution, and marketing have positioned us well and enabled us to establish a strong presence in the Indian BPC market.

vii. Competitive Strengths
Brand building capabilities and repeatable playbooks
Consumer-centric product innovation
Digital-first omnichannel distribution
Data-driven contextualized marketing





Objects of the Honasa Consumer Limited (Mamaearth) IPO:

The Offer comprises the Fresh Issue and an Offer for Sale. The company propose to utilise the Net Proceeds towards funding the following objects: 1. Advertisement expenses towards enhancing the awareness and visibility of the brands; 2. Capital expenditure to be incurred by the Company for setting up new EBOs; 3. Investment in the Subsidiary, Bhabani Blunt Hairdressing Private Limited (“BBlunt”) for setting up new salons; 4. General corporate purposes and unidentified inorganic acquisition    

Honasa Consumer Limited (Mamaearth) IPO Details:

Total Shares: 46,819,635
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Built Issue
Issue Size: 400 Cr.
Listing At: NSE,BSE

Promoters And Management:

i. Varun Alagh is one of the Promoters of the Company. He is the Chairman, Whole-time Director and the Chief Executive Officer of the Company. He holds a bachelor’s degree of engineering (electrical) from the University of Delhi, Delhi and a post-graduate diploma in business management from XLRI, Jamshedpur. He has been associated with the Company as a promoter and a director since September 16, 2016. Previously, he has worked with corporations such as Hindustan Lever Limited, Diageo India Private Limited for over a year and Coca-Cola India Private Limited. ii. Ghazal Alagh is one of the Promoters of the Company. She is a Whole-time Director and the Chief Innovation Officer of the Company. She holds a bachelor’s degree of computer applications from Panjab University, Chandigarh and a certification in software engineering from the academic council of the NIIT Academy, New Delhi. She has been associated with the Company as a promoter and director since September 16, 2016. iii. Ishaan Mittal is a Non-Executive Director of the Company and a nominee of SCI on the Board. He holds a bachelor’s degree of technology in mechanical engineering from the Indian Institute of Technology, Delhi and a master’s degree in business administration from Harvard University, Commonwealth of Massachusetts. He has been associated with the Company as a director since January 3, 2020. Previously, he has worked with the Boston Consulting Group (India) Private Limited for a period of over a year and is working with Sequoia Capital India for a period of over eight years where he is currently working as “Managing Director”.    

Financials of Honasa Consumer Limited (Mamaearth) IPO:

Balance Sheet
Particulars (Fig. in Cr) 2022 2021 2020
PPE 4 1 0
Share Capital 706 1,765 437
Debt (Long-Term+ Short Term) 4 1,954 593
Inventory 66 41 14
Trade Receivables 73 34 11
Trade Payables 170 80 22
Working Capital 395 82 55
Receivables days 28 27 37
Inventory Days - - -
Creditor Days - - -
Cash Conversion Cycle - - -
P&L Statement
Particulars (Fig. in Cr) 2022 2021 2020
Revenue From Operations 943 460 110
Purchases 304 161 49
Change in Inventories -21 -28 -12
Employees Benefit Expenses 79 28 9
Other Expenses 570 272 72
EBITDA 11 27 -8
OPM% 1.17% 5.87% -7.27%
Other Income 21 12 4
Depreciation 7 2 0
Finance Cost 3 1 0
Change in fair valuation of pref. shares 0 1,361 424
PBT 22 -1,325 -428
Tax 8 8 0
PAT 14 -1,333 -428
No. of Shares 18.32 18.32 18.32
EPS 0.76 -72.76 -23.36
Cash Flow Statement
Particulars (Fig. in Cr) 2022 2021 2020
PBT 22 -1324 -428
Cash Stuck in Working Capital 21 3 -2
Cash Flow From Operations 45 30 10
CFO/PBT 2.05 -0.02 -0.02
Capex Done -1 -1 0
Raise Cash from Debt - - -
Debt Repaid 0 0 0
Raise Cash from Equity 0 0 0
Cash in Hand 30 10 2
Ratio Analysis
Particulars 2022 2021 2020
EBITDA 11 27 -8
NPM 1.45% -282.42% -375.44%
D/E 0.01 1.11 1.36
Interest Coverage Ratio 3.67 27 0
Current Ratio 2.91 2.96 7.2
Asset Turnover 377.2 920 -
ROE 1.98% -75.52% -97.94%
ROCE 1.33% 12.86% -5.13%

Comparison With Peers:

As Per DRHP there is no listed peers.    

Recommendation on Honasa Consumer Limited (Mamaearth) IPO:

To be updated once Honasa Consumer Ltd files for RHP.

Registrar of Honasa Consumer Limited (Mamaearth) IPO:

  1. Kfin Technology Private Limited

Company Address:

Plot No. 63, 4th Floor, BLM Tower, Netaji Subhash Marg, Sector-44, Gurugram 122 003, Haryana, India  

Discussion on Honasa Consumer Limited (Mamaearth) IPO:

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