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HONASA IPO

Honasa Consumer Limited

IPO Doc

Start Date31-10-2023

Application Timing10am-5pm

Price Range₹308 - ₹324

Min Qty46

Min. Investment₹14168

Listing DateNA

Close Date02-11-2023

About Honasa Consumer Limited

Honasa Consumer Limited is the largest digital-first beauty and personal care (BPC) company in India in terms of revenue from operations for the FY 2023. Their flagship brand, Mamaearth, is built to meet a core customer need for safe-to-use, natural products, and focuses on developing toxin-free beauty products.

Mamaearth has emerged as the fastest growing BPC brand in India to reach an annual revenue of Rs. 10 billion within six years of launch.

Since launching Mamaearth in 2016, they have added five new brands The Derma Co, Aqualogica, Ayuga, BBlunt and Dr. Sheth’s. Their portfolio of brands includes products in the baby care, face care, body care, hair care, color cosmetics and fragrances segments.

They have grown their revenue at a CAGR of 80.14% from Rs. 459.9 Cr in FY 2021 to Rs. 1492.7 Cr in FY 2023.

Mamaearth was India’s most-searched BPC brand on Google Trends between Jan 2020 and June 2023.

They had a market share of 5.4% of the online BPC market in calendar year 2022, a market share of 1.5% of the total BPC market.

ABOUT THE INDUSTRY

The market for BPC products in India is expected to grow from approximately USD 20 billion in 2022 to approximately USD 33 billion in 2027 at a CAGR of 11%, which is among the highest within the broader retail categories and faster than other retail categories such as food and grocery, jewellery and watches, fashion, consumer electronics, home and living, and pharmacy and wellness in India.

India’s per capita spend on BPC products is currently one of the lowest in comparison to some of the other developing countries and is at the cusp of growth.

Why To Invest in Honasa Consumer Limited

India’s largest digital-first beauty and personal care company with well-established brand portfolio.

The Honasa Consumer Limited IPO proceeds will be used to fund advertising expenses, capital expenditure for setting up new exclusive brand outlets, and investment in subsidiary BBlunt.

Strengths And Risks

Brand Building Capabilities: Experience and success with Mamaearth has helped Honasa Consumer develop a brand building playbook which will continue to be critical to their success and scale faster.

Product Innovation: Over the last seven years, Honasa has built multiple tools and capabilities to capture insights into consumer needs. All new products are designed and developed by inhouse innovation team of 47 members.

Digital-First Omnichannel Distribution: Their omnichannel network allows them to be present across various touchpoints and serve consumers wherever they shop. The distribution model is led by their digital presence (DTC and e-commerce marketplaces).

Capital Efficient Growth: They have strategically built an asset-light scalable business model with in-house capabilities for strategic functions while outsourcing other operations.

Professional Leadership: The founders have diverse professional experience supported by a strong team with extensive experience in consumer business.

Losses : Honasa Consumer Limited has recorded losses in the past for FY 2021 and 2023, and the three months period ended June 30, 2022, wherein the restated loss was Rs.1332.2 Cr, Rs. 150.9 Cr, and Rs. 11.5 Cr, respectively.

High Advertising Expenses: For FY ‘21, ‘22 and ‘23, the advertisement expense as a percentage of revenue from operations was 38.6%, 41.4% and 35.5%, respectively. If they reduce ad expenses in the future, growth might be impacted.

Negative Cash Flows: Honasa Consumer had a net cash flow used in operating activities of Rs. (51.5) Cr in FY 2023. Negative cash outflows for long period, or significant cash outflows in the short term from investing and financing activities, could have an adverse impact on cash flow requirements, business operations and growth plans.

Loss Making Acquisitions: Their Subsidiaries acquired in the past, including Just4Kids, BBlunt, B:Blunt Spratt and Fusion, have incurred losses for certain historical periods. There is no assurance that these entities will be profitable in the future.

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Client Bank account Details:

Sr. No	Name of Bank Account	Bank Account Number	IFSC Code
1	ASTHA CREDIT AND SECURITIES P LTD - USCNBA A/c	00620340000150	HDFC0000062

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