Honasa Consumer Private Limited, the parent company behind well-known brands like Mamaearth, The Derma Co, and BBlunt, is set to launch one of the most eagerly awaited IPOs in the Indian consumer segment on October 31, according to multiple industry sources familiar with the matter.
The fast-growing direct-to-consumer (D2C) firm, operating in the beauty, babycare, and skincare sectors, achieved unicorn status in 2022 and received regulatory approval from SEBI in August after filing draft papers in December 2022.
“There is a strong demand for the Honasa Consumer IPO, which is scheduled for October 31 to November 2. The anchor portion will open on October 30. There is no plan for a pre-IPO round as of now,” said one of the sources.
Honasa Consumer was co-founded in 2016 by the husband-wife duo Varun and Ghazal Alagh, who are also known for their appearance on ‘Shark Tank.’ The company attained unicorn status when it raised $52 million at a valuation of $1.2 billion in a fundraising round in January 2022, led by top VC firm Sequoia Capital.
Another source shared with Moneycontrol that the company aims to raise approximately Rs 1,700 crore through a combination of a fresh issue and an offer-for-sale, targeting an estimated valuation of around Rs 10,500 crore.
In June 2022, a Reuters report suggested that Honasa Consumer was eyeing a valuation of $3 billion (over Rs 22,000 crore) for its IPO, which caused a stir on social media, with analysts and market experts questioning the lofty figure. In response, Ghazal Alagh issued a detailed clarification, stating, “In our DRHP, as is the standard practice, there is no mention of valuation. Valuation discovery is a process that will take place over time as we get into deeper conversations with the investor community. We have not quoted or subscribed to the valuation numbers which are getting mentioned in various posts on social media. We have built this company and our brands with a lot of love, the same way we have raised our children.”
Kotak Mahindra Capital, JM Financial, Citi, and JP Morgan are the investment banks working on the IPO, while Cyril Amarchand Mangaldas, IndusLaw, and Khaitan & Co are the legal advisors.
According to the draft red herring prospectus (DRHP), shareholders who will dilute their holdings include the Alaghs, Sofina Ventures SA, Evolvence, Fireside Ventures, Stellaris Venture Partners, Snapdeal founder Kunal Bahl, Bollywood actress Shilpa Shetty Kundra, Rishabh Harsh Mariwala, and Rohit Kumar Bansal. Sequoia Capital is not participating in the offer for sale.
The net proceeds from the IPO will be utilized for advertisement expenses to improve brand visibility and awareness, establishing new exclusive brand outlets, investment in BBlunt for setting up new salons, general corporate purposes, and inorganic growth.
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In January 2022, another player in the thriving D2C space, Warburg Pincus-backed Boat, also filed for an IPO, with the audio-focused electronics brand looking to raise approximately Rs 2,000 crore.
