Honasa Consumer Limited, commonly known as ‘Mamaearth’ is coming up with an IPO consisting of fresh issue of equity shares worth INR 365 crores and an offer to sell 4.12 crore shares of existing shareholders.
With the funds raised from fresh issue, the company plans to set up new EBOs, invest in its subsidiary for opening new salons, and to meet the advertising expenditure required to enhance awareness and visibility of the brand.
Mamaearth IPO – Important Details
|Mamaearth IPO Date||October 31, 2023 to November 2, 2023|
|Mamaearth IPO Listing Date||November 10, 2023|
|Mamaearth IPO Price||₹308 to ₹324 per share|
|Mamaearth IPO Lot Size||46 Shares|
|Mamaearth IPO Total Issue Size||Approx INR 1950 crores|
|Mamaearth IPO Basis of Allotment||November 7, 2023|
|Mamaearth IPO Initiation of Refunds||November 8, 2023|
|Mamaearth IPO Credit of Shares to Demat||November 9, 2023|
|Mamaearth IPO Issue Type||Book Built Issue IPO|
|Mamaearth IPO Listing At||BSE, NSE|
Mamaearth IPO – Company Profile
Founded in 2016, the company is India’s largest digital-first beauty and personal care (BPC) entity based on its operational revenue for FY 2023. Besides its flagship brand ‘Mamaearth’, the company has expanded its portfolio to include brands like The Derma Co., Aqualogica, Ayuga, BBlunt, and Dr. Sheth’s, thereby establishing a ‘House of Brands’ structure.
Additionally, the company continuously seeks to connect better with the consumers and strengthen its brand equity by building ‘purpose-driven’ brands associated with environmental and social impact causes. For instance, through the Mamaearth ‘Plant Goodness’ initiative, we work with a non-government organization to plant trees for orders placed on our direct-to-consumer (“DTC”) platform and share geo-tagged images of these trees with the consumers.
Mamaearth was India’s most-searched BPC brand on Google Trends between January 2020 and June 2023. In a short span of six years, Mamaearth has captured an approximately 8.3% market share in the face-wash category in India in terms of revenue from operations.
Mamaearth IPO – Fundamental Analysis
Mamaearth’s financial data presents a mixed picture. While revenue growth and improvement in the equity position are positive signs, the company’s inconsistent profitability, declining RoNW, and negative EPS in 2023 are concerning.
Potential investors should conduct thorough due diligence, review the IPO prospectus, assess the company’s business model, and consider market conditions before investing. Consultation with a financial advisor is recommended, especially given the company’s financial fluctuations.
Mamaearth has shown remarkable revenue growth over the past three years, with revenues increasing from ₹4,599.90 million in 2021 to ₹14,927.48 million in 2023. This signifies strong sales expansion.
The company’s profitability has been inconsistent. After a significant loss of ₹13,322.15 million in 2021, it turned a profit of ₹144.43 million in 2022. However, profitability declined, resulting in a loss of ₹1,509.66 million in 2023. This fluctuation raises concerns about the company’s ability to sustain profitability.
Return on Net Worth (RoNW):
The RoNW improved from negative figures to 2.23% in 2022, but the company experienced a sharp drop with a negative RoNW of -23.57% in 2023. This downward trend indicates financial instability and potential operational issues.
Earnings per Share (EPS):
The Diluted EPS increased from a significant negative figure of ₹98.35 in 2021 to a positive ₹0.52 in 2022. However, it deteriorated to a negative ₹4.66 in 2023. A negative EPS is a concerning sign for investors.
Net Asset Value (NAV):
The NAV per Equity Share improved from a negative ₹61.80 in 2021 to ₹19.27 in 2023, strengthening the company’s asset value.
The total liabilities have decreased from ₹20,677.82 million in 2021 to ₹3,605.14 million in 2023, suggesting effective liability management.
Mamaearth IPO Financial Information
|Particular||As at 31 March 2021||As at 31 March 2022||As at 31 March 2023|
|Revenue (₹ in millions)||4,599.90||9,434.65||14,927.48|
|Equity (₹ in millions)||(17,651.43)||7,056.24||6,059.01|
|Expenses (₹ in millions)||1 7,967.10||9,419.06||15,016.11|
|Profit and Loss After Tax (₹ in millions)||(13,322.15)||144.43||(1,509.66)|
|Diluted EPS only (₹)||(98.35)||0.52||(4.66)|
|NAV per Equity Share (₹)||(61.80)||23.42||19.27|
|Total Assets (in millions)||3,026.39||10,350.12||9,664.15|
|Total Liabilities (in millions)||20,677.82||3,293.88||3,605.14|
|Gross Profit Margin(%)||71.15%||69.96%||70.07%|
Mamaearth IPO Peer Comparison
Mamaearth’s IPO indicates lower revenue and negative earnings, with a negative RoNW. In contrast, established brands like Hindustan Unilever, Procter & Gamble, and Colgate Palmolive exhibit robust financials, with higher P/E, positive RoNW, and stronger EPS, making them more attractive investments.
|Company||Revenue (₹ in million)||Face Value per Equity Share (₹)||P/E||EPS (Basic) (₹)||EPS (Diluted) (₹)||RoNW (%)||NAV per Equity Share (Basic) (₹)|
|Honasa Consumer Limited||14,927.48||10||NA||(4.66)||(4.66)||(23.57)%||19.27|
|Hindustan Unilever Limited||605,800.00||1||59.16||43.07||43.04||20.08%||215.02|
|Colgate Palmolive (India) Limited||52,261.97||1||54.25||38.50||38.50||61.01%||63.11|
|Procter & Gamble Hygiene and Health Care Limited||39,179.00||10||83.12||208.91||208.91||71.68%||291.44|
|Dabur India Limited||115,299.00||1||54.53||9.64||9.61||18.02%||53.29|
|Godrej Consumer Products Limited||133,159.70||1||59.09||16.65||16.65||12.34%||134.88|
|Bajaj Consumer Care Limited||9,608.73||1||25.65||9.48||9.47||17.63%||55.10|
|Gillette India Limited||24,770.50||10||57.82||109.15||109.15||35.97%||303.47|
Mamaearth IPO Objective
The main objective of Mamaearth’s IPO is to allocate INR 182 crores for advertising, INR 20.60 crores for new Exclusive Brand Outlets (EBOs), and INR 26 crores for 20 new BBlunt salons, strengthening customer outreach, expanding EBOs, and capitalizing on salon acquisitions.
- To fund advertising expenses: Over the years, as the business has grown and the advertisement strategy to widen the customer base has evolved to focus on deploying a holistic marketing strategy across digital and traditional platforms to improve the reach and drive effective engagement to acquire new consumers. The company proposes to spend INR 182 crores from the net proceeds for the said purpose.
- For setting up new EBOs: The company launched its first EBO (Exclusive Brand Outlet) on 10.10.2021. Since then, the company has scaled up the no.of EBOs to 85 across 46 districts. To further capitalize on the market, they propose to utilize INR 20.60 crores for the purpose of setting up new EBOs.
- To invest in its subsidiary to set up new salons: The acquisition of BBlunt in March 2022 enabled us to access the professional salon channel. By delivering personalized experiences at these salons with recommendations from trained stylists, the company has built trust amongst consumers, strengthening brand equity for the products. The company proposes to utilize INR 26 crores out of the net proceeds towards investment in BBlunt for the purpose of setting up 20 new Salons of BBlunt.
Mamaearth IPO Risks And Challenges
Mamaearth faces risks from potential failures in new product launches, heavy reliance on third-party manufacturers, and dependence on the sales performance of the top 10 products, which collectively contribute 30% of revenue.
- Launching new brands or products that prove unsuccessful could affect the growth plans, which could adversely affect the business, financial condition, cash flows, and results of operations.
- The company doesn’t produce its products but relies solely on third-party manufacturers for production. This dependence on external manufacturers exposes the company to risks. If these risks materialize, they could negatively impact the business, operational results, cash flows, and financial health.
- The company derives almost 30% of its revenue from its top 10 products. Any decrease in the sales of the key products will adversely affect the business, cash flows, financial condition, and results of operations.
Mamaearth IPO – Industry & Market Potential
India’s Beauty and Personal Care (BPC) market is valued at around US$20 billion and is projected to grow at an annual rate of 11%, reaching approximately US$33 billion by 2027. Factors such as technological advancements, demographic shifts, and rising consumer aspirations are reshaping the BPC market in India.
The BPC segment is anticipated to expand more rapidly than sectors like food, grocery, and consumer electronics, positioning BPC as one of the most promising retail categories in terms of growth.
Mamaearth IPO – Type of Offer
The company aims to gather INR 365 crores through a fresh share issue for expanding outlets, subsidiary support, and advertising. Additionally, existing shareholders, including promoters, will sell 4.12 crore shares.
- Fresh Issue: The company will issue new shares to raise capital, aiming to collect INR 365 crores. The company intends to utilize the proceeds from the fresh issue to establish additional Exclusive Brand Outlets (EBOs), support its subsidiary in launching new salons, and cover the advertising expenses necessary to boost brand awareness and visibility.
- Offer for sale: Current shareholders, comprising promoters and initial investors, will offload a part of their company holdings, amounting to 4.12 crore shares.
Mamaearth IPO Offer Size
The Mamaearth IPO comprises a new equity share issuance of INR 365 crores and the sale of 4.12 crore shares by existing shareholders. The fresh issue funds will be used to establish additional EBOs, invest in subsidiary salon openings, and boost brand awareness through advertising.
Mamaearth IPO Allotment Structure
Mamaearth IPO allotment structure designates 75% of shares for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Investors (NIIs), and 10% for Retail Individual Investors (RIIs), adhering to SEBI regulations.
- Qualified Institutional Buyers (QIB): As per SEBI regulations, 75% of the shares offered through the IPO will be reserved for Qualified Institutional Buyers. These include entities such as banks, mutual funds, and insurance companies.
- Non-Institutional Investors (NII): 15% of the shares will be reserved for Non-Institutional Investors. These typically include corporate bodies or individuals investing more than Rs. 2 lakhs.
- Retail Individual Investors (RII): The remaining 10% of the shares will be allotted to Retail Individual Investors. These individual investors apply for shares with a total value of less than Rs. 2 lakhs.
How to apply for a Mamaearth IPO?
To apply for the Mamaearth IPO through Alice Blue, you would typically follow these steps:
1. Open a Demat and Trading Account: If you don’t have one already, you would need to open a Demat and trading account with Alice Blue.
2. Check for IPO Details: Once your account is active, you can check for the Mamaearth IPO details in the IPO section of the Alice Blue platform.
3. Place the Bid: Enter the number of shares you wish to buy and place your bid within the IPO’s price band.
4. Submit the Application: Confirm all your details and submit your application.
You can apply for the Mamaearth IPO at Alice Blue in just a few clicks!
Check Allotment Status: Post the allotment process, you can check the allotment status to see if you have received any shares.
Please note that the allotment of shares is not guaranteed and will depend on the demand for the IPO.
How to Check Mamaearth IPO Allotment Status on Alice Blue?
Checking the allotment status of an IPO in Alice Blue is usually straightforward. Please follow these general steps:
1. Log in to your Alice Blue Account: You can do this through the Alice Blue website or their trading app.
2. Navigate to the Portfolio or IPO Section: This might differ based on the layout of Alice Blue’s platform, but generally, you can find the status of your IPO application under the ‘Portfolio’ or ‘IPO’ section.
3. Find the IPO Allotment Status: Look for a sub-section called ‘IPO Allotment Status’ or something similar. This is where you can see the status of the IPOs you have applied for.
4. Select the Mamaearth IPO: If you have applied for multiple IPOs, there might be a dropdown menu or a list where you can select the IPO you are interested in. Select the Mamaearth IPO.
5. Check the Status: The status of your application should be displayed here. If the shares have been allocated to you, it would be mentioned here.
If you face any issues, it’s recommended to contact Alice Blue’s customer support for detailed assistance.
Apart from Alice Blue, there are other ways to check the allotment status of the Mamaearth IPO:
- Registrar’s Website: Visit the website of KFin Technologies Limited, the registrar of the Mamaearth IPO. On the homepage, look for the ‘IPO Allotment Status’ option. You must enter your PAN, application, or Demat account number to check your allotment status. Click on the ‘Submit’ button to view your IPO allotment status.
- NSE and BSE: You can also check the allotment status on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) official websites. You would need your application number and PAN to check the status.
Please note that the allotment status will only be available after completing the allotment process, a few days after the IPO window closes.
Mamaearth IPO Offer Registrar
The registrar for the Mamaearth IPO is KFin Technologies Limited. They are responsible for ensuring the IPO allotment and refund processes are carried out smoothly.
Contact information for the registrar:
KFin Technologies Limited
Selenium, Tower B, Plot No. 31 and 32
Hyderabad, 500 032
Tel: +91 40 6716 2222
E-mail: [email protected]
Mamaearth IPO FAQs
1. What is the allotment date of the Mamaearth IPO?
The allotment date is November 7, 2023.
2. What is the price band of the Mamaearth IPO?
The price band of the shares issued by the company is ₹308 to ₹324 per share.
3. What is the size of the Mamaearth IPO?
Honasa Consumer Limited, widely recognized as ‘Mamaearth,’ is launching an IPO. This offering comprises a new equity share issue of INR 365 crores and the sale of 4.12 crore.
4. What is the listing date of the Mamaearth IPO?
The listing date is November 10, 2023.