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Indian Honasa Consumer's Oversubscribed IPO

Published November 13, 2023
Published November 13, 2023

The IPO of Honasa Consumer, Mamaearth's parent firm, was oversubscribed by 7.6 times, fetching bids worth 71.3 billion rupees ($856.75 million), but by the end of the first week of trading, shares dropped 21% below the issue price.

WHO: Former Hindustan Unilever executive Varun Alagh and his wife Ghazal launched Mamaearth in 2016 as Asia's first made-safe certified brand of natural skincare, haircare, and baby care products for the Indian market. Under the portfolio of Honasa Consumer, the company has built a "House of Brands" business architecture that consists of The Derma Co. BBlunt, and Dr. Sheth's, all acquired in 2022, as well as Aqualogica and Ayuga. The brand's products are sold on major e-commerce platforms such as Amazon, Nykaa, and Flipkart, as well as in over 2,000 multi-brand stores across 40 cities in India.

WHY: The company intends to use the net proceeds to finance advertising costs to increase brand awareness, build up new EBOs, expansion of new salons by the company's subsidiary Bhabani Blunt Hairdressing Private Limited (BBlunt), general corporate objectives, and an unidentified inorganic acquisition.


  • Honasa Consumer was listed on the National Stock Exchange of India (NSE) with a Rs 1,701.44 crore IPO. The firm currently has a market cap of $1.3 billion.  
  • Honasa Consumer share price was listed at ₹330 ($4) per share, 1.85% higher than the issue price of ₹324 ($3.89) on the NSE.
  • Investors bid for more than 220 million shares, compared with the 28.9 million shares on offer.
  • In the fiscal year 2023, Mamaearth reported revenues of approximately $170 million, with the online channel yielding around 56% of this figure. The company maintains a gross margin of 70%, alongside an adjusted EBITDA margin of 3%. Offline sales now represent 36% of the total revenue, marking an increase for the fiscal period.
  • Mamaearth accounts for approximately 80% of its revenue in the fiscal year 2023.
  • Online sales, including direct-to-consumer and e-commerce, deliver 59% of total revenue across nearly 18,600 pin codes. Offline channels contribute 36% of sales, span over 154,000 retail points, and incorporate a mix of traditional and modern trade outlets, exclusive stores, and BBlunt salons.
  • The IPO will see the sale of 3,186,300 shares by Honasa promoter Varun Alagh and up to 100,000 shares by his wife Ghazal Alagh. Several other shareholders, including Kunal Bahl, Shilpa Shetty Kundra, Rishabh Harsh Mariwala, Fireside Ventures Fund, Sofina, Stellaris, and Rohit Kumar Bansal, will be selling their stakes in the OFS. The IPO delivered returns ranging from 8 to 108 times the initial investment to its pre-IPO investors.
  • The bookrunning lead managers of the Honasa Consumer IPO are Kotak Mahindra Capital Company Limited, Citigroup Global Markets India Private Limited, Jm Financial Limited, and J.P. Morgan India Private Limited. The registrar of the offering is Kfin Technologies Limited.


  • In January 2022, Honasa Consumer raised $52 million in a funding round led by Sequoia, reaching unicorn status with a valuation of $1.2 billion. Other investors in the round included Sofina and Evolvence. 
  • In July 2021, the company raised $50 million in a funding round led by Sofina Ventures, valuing it at $730 million.
  • In January 2020, Mamaearth's parent company Honasa raised INR 130 Cr ($18 million) in a Series B funding round.
  • In September 2018, the brands raised a Series A with participation by Stellaris Venture Partners and Rishabh Mariwala.
  • In December 2016 and August 2017, the business raised seed rounds from Fireside Ventures and Snapdeal founders.

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