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Honasa Consumer, the parent company of brands such as Mamaearth, The Derma Co, and Aqualogica, has announced plans to launch its initial public offering (IPO) on October 31 despite industry concerns. This comes after the Gurugram-based direct-to-consumer (DTC) company obtained approval for the IPO from the Securities and Exchange Board of India (SEBI) in August.
Honasa aims to raise a significant Rs 10,500 crore in the IPO and negotiate a pre-IPO round worth between $120-150 million. The company has reserved shares worth Rs 1 crore specifically for its employees. The issue will include a fresh release of shares worth Rs 365 crore and an offer for sale (OFS) of 4.12 crore equity shares. If the issue size reaches Rs 1,700 crore, the OFS could amount to approximately Rs 1,335 crore.
The funds raised through the IPO are earmarked for various purposes including advertising, opening new exclusive brand outlets (EBOs), and establishing new salons in its subsidiary BBlunt. The remaining funds will be used for general corporate purposes and potential acquisitions.
Honasa has established itself as India’s largest digital-first beauty and personal care company by FY23 revenue, with income growing at a compound annual growth rate (CAGR) of 80.14% between FY21-FY23. Despite a net loss of Rs 142.8 crore in FY23 due to goodwill impairment losses, the company reported an impressive EBITDA rise of nearly 98% year-on-year (YoY) to Rs 22.8 crore. Furthermore, net profit for the June FY24 quarter was Rs 25.96 crore.
The company’s promoters currently hold a stake of 37.41%, with public entities such as Fireside Ventures Fund and Sequoia Capital holding the remaining shares. The basis of allotment for the IPO will be finalized on November 7, and successful investors will have shares credited to their demat accounts on November 9. The equity shares are set to be listed from November 10.
Merchant bankers for the offer include Kotak Mahindra Capital Company, with KFin Technologies serving as the registrar. Honasa offers a wide range of products across various categories including baby care and hair care.
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