Honasa Consumer, the parent company of the brand Mamaearth, just stepped into the primary market with an IPO on October 31. As the IPO remains open till November 2, here is everything you need to know before you decide if the company is worthy of your investment.
Owned by Varun & Ghazal Alagh, Honasa Consumer Limited popularly known as Mamaearth has launched its public issue in the share market. The Initial Public Offering (IPO) of Honasa Consumer Limited hit the primary market on October 31 and it’ll remain open for bidding till 2nd November 2023.
Company Profile
Honasa Consumer owns and operates several consumer brands including Mamaearth, The Derma Co., Aqualogica, Dr Sheth’s, Ayuga, and BBLUNT. The company reported the highest revenue from operations in the financial year 2023. Its brand Mamaearth became the fastest-growing beauty and personal care brand, reaching an annual revenue of Rs 1,000 crore in just six years.
Honasa offers a range of products in categories like baby care, face care, body care, hair care, cosmetics, and fragrances. In 2022, it held a 5.4% market share in the online beauty and personal care market, 1.5% in the total market, and around 28.9% in the direct-to-customer segment in India.
Mamaearth IPO Size and Lot Size
The price band of the IPO has been fixed at Rs 304-324 per share. The company aims to raise Rs 1,701 crore through the public offering at the highest price. This involves issuing new shares worth Rs 365 crore and selling 4.13 crore existing shares from promoters and investors.
Individuals can bid for a minimum of 46 shares in this IPO and then in multiples of 46 shares. Retail investors must invest at least Rs 14,904 for 46 shares. Furthermore, investors can’t exceed Rs 1,93,752 for 598 shares since the maximum investment limit is Rs 2 lakh.
Financial Performance
Honasa Consumer revealed a robust revenue growth at an 80.14% annual rate from FY21 to FY23. FY23, it faced a net loss of Rs 142.8 crore.
In the June FY24 quarter, it achieved a net profit of Rs 25.96 crore. Whereas a loss of Rs 9.3 crore in the same period last year was recorded.
Risk Factor While Investing in Mamaearth IPO
a) Honasa doesn’t manufacture its products, relying entirely on third-party manufacturers. In FY23, the top three manufacturers accounted for 51.73% of its total purchased goods.
b) The company depends heavily on a few products. The top 10 items contributed 27.38% of revenue in FY23.
c) Most of its revenue comes from the flagship Mamaearth brand, making up 82% of total revenue in FY23.
d) Introducing unsuccessful new brands or products could impact its growth strategy.
e) In the past, the firm had negative cash flows from operations, investments, and financing activities.
f) It faces intense competition, which might affect its market share.
Courtesy Link: https://www.moneycontrol.com/news/business/ipo/mamaearth-ipo-opens-on-oct-31-ten-things-to-know-before-you-buy-it-11624901.html
