Honasa Consumer (Mamaearth) Limited

About  Honasa Consumer (Mamaearth) Limited

Incorporated in 2016, Honasa Consumer Limited is India’s largest digital-first beauty and personal care (BPC) company in India. Since launching its flagship brand - Mamaearth, in 2016, it has added five new brands to its portfolio, including The Derma Co., Aqualogica, Ayuga, BBlunt and Dr. Sheth’s, building a ‘House of Brands’ architecture.

Its products cater to market segments such as baby care, face care, body care, colour cosmetics and fragrances. As of 30 June 2023, it has a dedicated in-house innovation team of 47 members, that drives end-to-end ideation and execution of new product launches.

These products are distributed through an omni-channel distribution network. First, trials are generated using its leverage on online channels. Once a product or brand reaches a mature stage, it is selectively introduced in offline stores. It even recorded the highest revenue from offline channels among digital-first BPC companies in India in FY23. 

The company operates a data-led contextualised marketing strategy. It integrates consumer data across demographic, behavioural, and transactional variables and influencer collaboration on digital platforms to deliver personalised user experience.

Between FY21 and FY23, it saw a CAGR rise of over 48% in its revenue from operations. In terms of gross merchandise value, the company has a market share of 5.4% in the online BPC market in the calendar year 2022. Moreover, the BPC products market in India is expected to grow at a CAGR of ~11% between FY22 and FY27. All of this could be beneficial for the company. 

And now, Honasa Consumer Limited is coming out with its initial public offer (IPO). The IPO will be an offer for sale as well as a fresh issue. The money raised through the fresh issue will be utilised for advertisement expenses, capital expenses to set up new EBOs (Exclusive Brand Outlets), investment in its subsidiary ‘BBlunt’ and general corporate purposes. Its shares will be listed on the NSE and the BSE.

Here are key details about the Honasa Consumer (Mamaearth) Limited IPO:

Financial snapshot

Here’s a quick look at Honasa Consumer (Mamaearth) Limited IPO’s strengths, weakness, opportunities and risks (SWOT analysis)

Strengths and opportunities

1. Brand building capabilities as it introduced new BPC brands and products in the last seven years based on changing consumer dynamics. 
2. Ability to drive growth as it saw a CAGR rise of 48% in its revenue from operations between FY21 and FY23 compared to the industry average of 28%. 
3. Repeatable playbooks as 38%, 43% and 56% of its revenue from operations generated in FY21, FY22 and FY23, respectively, from the DTC (direct-to-consumer) channel for the Mamaearth brand came from existing customers.
4. Consumer-centric product innovation such as Social Listening, Online Competitive Intelligence and User Conversational Research. 
5. Digital first distribution strategy followed by omni-channel distribution as it derived 81%, 69% and 59% of its total revenue from operations in FY21, FY22 and FY23 from DTC and e-commerce marketplaces.  

Risks and threats

1. Completely reliant on third party manufacturers for production, which accounted for 81%, 70% and 51% of the total value of its purchase of traded goods in FY21, FY22 and FY23 respectively. 
2. Faces intense competition as the BPC space has a low barrier to entry. 
3. Has recorded losses in the past, making up ₹1,332 crore in FY21 and ₹150 crore in FY23.
4. Derives a significant portion of its revenue from the Mamaearth brand representing 96%, 93% and 81% of its total revenue from operations in FY21, FY22 and FY23 respectively. 
5. Incurs significant advertisement expenses such as ₹530 crore in FY23. Also, it heavily relies on celebrities and social media influencers as part of its marketing strategy.
6. Has experienced negative cash flows from operating, investing and financing activities in the last three years. 

Honasa Consumer (Mamaearth) Limited IPO details

|Honasa Consumer (Mamaearth) Limited IPO date

According to the offer document filed by the company with the SEBI, the Honasa Consumer IPO’s opening date – in other words, the Honasa Consumer IPO launch date – will be 31st October 2023. The Honasa Consumer IPO closing date is 2nd November 2023. After this, investors will be updated about the allotment status on 7th November 2023.

Investors, who have been allotted shares, can expect them to be credited to their demat account on 9th November 2023. The Honasa Consumer IPO listing date is 10th November 2023. The listing date is the date on which the shares of a company get listed on the bourses – NSE and BSE. 

|Honasa Consumer (Mamaearth) Limited IPO Price Band

The IPO is an offer for sale as well as a fresh issue. The Honasa Consumer IPO price band has been set between ₹308 and ₹324 per share. Interested investors can choose a price within this band to apply for the IPO. 

The Honasa Consumer IPO listing price will be determined on 10th November 2023. The listing price is the price at which a company’s shares debut on the stock exchanges.

|Honasa Consumer (Mamaearth) Limited IPO Lot size

The Honasa Consumer IPO details have been declared. The Honasa Consumer IPO lot size is set at 46 shares and an investor can apply for a minimum of 1 lot. Meanwhile, the Honasa Consumer IPO issue size is approx ₹1,701 crore.

How to pre-apply for the Honasa Consumer (Mamaearth) Limited IPO?

You can pre-apply for the Honasa Consumer (Mamaearth) Limited IPO on Upstox. The pre-application for this IPO, which means pre-apply open date, usually begins a day before the IPO opens for subscription. 

Follow these steps to pre-apply for the IPO: 

1. Login to your Upstox account, using your six-digit PIN
2. After successfully logging in, click on ‘Discover’
3. On the Discover tab, you will find the ‘Invest in IPO’ section
4. Under the Invest in IPO section, look for the ‘Honasa Consumer (Mamaearth) Limited IPO’ tab and click on it
5. Now fill in all the required information, like ‘bid price’ and ‘lot size’
6. Confirm and click on ‘Pre-Apply’
7. Accept the mandate on your UPI app

How to apply for the Honasa Consumer (Mamaearth) Limited IPO?

If you are interested in this investment opportunity but unsure how to apply for the Honasa Consumer (Mamaearth) Limited IPO, here we are listing out the steps for you. 

When the public issue opens for subscription, one can follow this step-by-step guide on how to apply for the Honasa Consumer (Mamaearth) Limited IPO on Upstox: 

1. Login to your Upstox account, using your six-digit PIN
2. After successfully logging in, click on ‘Discover’
3. On the Discover tab, you will find the ‘Invest in IPO’ section
4. Under the Invest in IPO section, look for the ‘Honasa Consumer (Mamaearth) Limited IPO’ tab and click on it
5. Now fill in all the required information, like ‘bid price’ and ‘lot size’
6. Confirm and click on ‘Apply’
7. Accept the mandate on your UPI app

How to check the Honasa Consumer (Mamaearth) LimitedIPO allotment status?

When the allotment process is completed, you can check the status of your application on the Upstox app. Share allotment is generally done around five to six days after an IPO closes. 

Here’s a step-by-step guide on how to check the Honasa Consumer (Mamaearth) Limited IPO allotment status:

1. Login to your Upstox account, using your six-digit PIN
2. After successfully logging in, click on ‘Discover’
3. On the Discover page, you will find the ‘Invest in IPO’ section
4. Under the Invest in IPO section, you will find the ‘View all’ option
5. Once you click on ‘View all’, you will be directed to the ‘IPO’ tab
6. In the ‘IPO’ tab, click on ‘My applications’ 
7. In ‘My applications’, under the History section, your Honasa Consumer (Mamaearth) Limited IPO allotment status will be mentioned

Check Allotment Status

Open a demat account with Upstox to apply for the Honasa Consumer (Mamaearth) Limited IPO

To apply for the Honasa Consumer (Mamaearth) Limited IPO, you need to mandatorily have a demat account. A demat account helps you hold the shares you buy in a dematerialised format. If you don’t have a demat account yet, you can open one with Upstox by visiting our website or by downloading the app.

Here is a step-by-step guide on how to open a demat account with Upstox:

1. Click here to visit the demat account opening page on the Upstox website. 
2. Enter your phone number and other essential details to begin opening a demat account.
3. Upload the scanned copies of your PAN, Aadhaar card, a cancelled cheque, and your bank statement as needed. 
4. Complete the e-verification using the OTP sent to your registered mobile number. 

This is all it takes to open a demat account with Upstox. Easy and quick, right? 

Open Demat Account

Upstox – trading app to apply for the Honasa Consumer (Mamaearth) Limited IPO

Applying for IPOs with Upstox is extremely easy. The user-friendly interface and top-notch security make Upstox one of the leading trading apps in India.

You can apply for the Honasa Consumer (Mamaearth) Limited IPO on Upstox, provided you have a demat account. As mentioned in the previous section, you can simply follow the steps to open a demat account with Upstox. The biggest advantage is that when you apply for an IPO using your Upstox account, the brokerage charges are zero.

In fact, courtesy of its robust features and minimal charges, Upstox is among the most preferred trading apps. Lakhs of Indians trust Upstox as it is a reliable trading platform that makes IPO applications easy.