Mamaearth Parent Files for IPO Papers; Sofina, Stellaris, Shilpa Shetty to Sell Stake

Honasa Consumer Private Ltd, the first unicorn of 2022 and the parent firm of brands such as Mamaearth, The Derma Co and BBlunt has filed draft papers with Sebi for listing to raise funds through a combination of a fresh issue and an offer-for-sale.

Popular brand Mamaearth’s owner Honasa Consumer Limited has filed its Draft Red Herring Prospectus (DRHP) on Thursday with market regulator Securities and Exchange Board of India (SEBI) to raise funds through an initial public offering.

The Company plans to raise funds through offer of equity shares (face value Rs10 each) through the public issue. Mamaearth IPO comprises of fresh issue of equity shares aggregating up to ₹400 crore and offer for sale (OFS) of up to 46,819,635 equity share by selling shareholders.

The OFS comprises of – up to 3,186,300 equity shares by promoter Varun Alagh and up to 100,000 equity shares by promoter Ghazal Alagh along with Evolvence India Fund III Ltd, Fireside Ventures Investment Fund –I, Stellaris Venture Partners India I, among others.

The other selling shareholders also include – up to 777,672 equity shares by Kunal Bahl, up to 477,300 equity shares by Rishabh Harsh Mariwala, up to 777,672 equity shares by Rohit Kumar Bansal and up to 554,700 equity shares by actor Shilpa Shetty Kundra.

The net proceeds of the IPO will be used for advertisement expenses to improve brand visibility and awareness, setting up new exclusive brand outlets, investment in BBlunt for setting up new salons, general corporate purposes and inorganic growth.

Mamaearth’s filing with the market regulator comes on the back of another filing back in January by a peer in the bustling D2C space – Warburg Pincus backed boat. The audio focused electronics brand is looking to raise around Rs 2,000 crore.

Kotak Mahindra Capital, JM Financial, Citi and JP Morgan are the investment banks working on the IPO and Cyril Amarchand Mangaldas, IndusLaw and Khaitan & Co are the legal advisors.

Honasa Consumer , which is popular for its wide range of ‘toxin free’ products has hit the inorganic route in the last 12-15 months with three buyouts. Firstly, it acquired female oriented content platform Momspresso followed by BBlunt from Godrej Consumer Products Ltd and later it beefed up its product portfolio by acquiring skincare brand Dr. Sheth’s. It entered the colour cosmetics category in October, 2021, offering products like liquid lipsticks, bullet lipsticks, kajal and lip balms. A month later, the firm launched a new hydration based skincare brand Aqualogica.

Other players in the beauty and skin care segment include the likes of listed rival Nykaa, Purplle, The Good Glam Group & Sugar Cosmetics. Nykaa had a bumper debut on the bourses in 2021 but the firm’s share price has plummeted since then.

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