The much-awaited initial public offering (IPO) of Honasa Consumer Ltd., Mamaearth’s parent company, is scheduled to debut on October 31, 2023, and the Indian stock market is agog with expectation. In India’s personal care market, Mamaearth has grown quickly to become a household name thanks to its constant dedication to natural and ecological products. The company’s appealing initial public offering (IPO) pricing range of Rs 308-324 per share has attracted a lot of interest from investors. It’s important to examine the investors, their incredible profits, and the possible effects of this momentous decision as the IPO draws near.
Credits: MoneyControl
Investor Returns – A Journey of Extraordinary Gains
Mamaearth’s success story has not only captured the hearts of consumers but has also rewarded early investors with remarkable returns.
Marico’s Rishabh Harsh Mariwala: A 53x Return
Among these investors, Rishabh Harsh Mariwala, associated with Marico, stands out with an extraordinary 53x return on his investment. His faith in Mamaearth’s growth story, with an average acquisition cost of just Rs 6.05 per share, has undoubtedly paid off, serving as a testament to the allure of the IPO.
Bollywood’s Shilpa Shetty Kundra: An 8x Windfall
Bollywood actor Shilpa Shetty Kundra, who also holds a stake in Mamaearth, is set to walk away with impressive returns. Her average cost of acquisition at Rs 41.86 per share has translated into an 8x return on her investment. Shilpa’s endorsement of Mamaearth’s vision adds to the IPO’s broad appeal.
Snapdeal’s Kunal Bahl and Rohit Bansal: Over 100x Returns
Snapdeal co-founders Kunal Bahl and Rohit Bansal, early investors in Honasa Consumer back in 2018, have struck gold. Their initial acquisition cost was a mere Rs 3.21 per share, resulting in returns exceeding a staggering 100x. This remarkable success story showcases their confidence in Mamaearth’s potential and the company’s exceptional growth journey.
Additional Investors – A Mix of Gains: Beyond these prominent investors, there is a diverse group of shareholders who have experienced varying degrees of success. Co-founders Varun Alagh and Ghazal Alagh, with negligible acquisition costs, find themselves in an enviable position. Fireside Ventures Fund, with an acquisition cost of Rs 7.33 per share, has realized substantial gains of 44.2x. Meanwhile, Stellaris and Sofina have seen more modest returns of 44.2x and 3x, respectively, reflecting the diversity of investors and their distinct investment strategies.
IPO Overview – Fresh Issue and Offer for Sale
The Mamaearth IPO consists of a fresh issue of Rs 365 crore and an offer for sale of up to 41.25 million shares. The upper price band of Rs 324 per share is expected to raise approximately Rs 1,701.44 crore, valuing the company at an impressive Rs 10,424.53 crore. This valuation reflects the market’s unwavering trust in Mamaearth’s business model and its potential for growth.
Honasa Consumer and Its Portfolio of Brands
Honasa Consumer Ltd, the parent company of Mamaearth, boasts a rich portfolio of successful brands in the beauty and personal care (BPC) sector. This diverse portfolio includes Mamaearth, The Derma Co, Aqualogica, Ayuga, and BBlunt. The company proudly claims the title of the largest digital-first BPC company in India in terms of revenue for the fiscal year 2023. Their growth trajectory is indeed impressive, with a Compound Annual Growth Rate (CAGR) of 80.14% in revenue from operations during FY21 to FY23. In FY23, the company achieved a substantial revenue of Rs 1,492.75 crore.
Despite the robust revenue growth, it’s crucial to note that Honasa Consumer reported a net loss of Rs 142.8 crore for the fiscal year ending in March 2023. This could be attributed to the company’s substantial investments in expansion and innovation, which are common in the fast-paced world of consumer goods. As Mamaearth takes the leap into the stock market, it remains to be seen whether this move will help the company steer towards profitability.
Conclusion – The Path Ahead for Mamaearth
The parent business of Mamaearth, Honasa Consumer Ltd., is about to go public and is expected to cause a stir in the Indian stock market. The company’s growth trajectory is truly exceptional, as seen by the significant value and great returns for early investors. Mamaearth’s IPO success may highlight the growing demand for natural and eco-friendly personal care products among consumers. But, there are chances and difficulties to be dealt with, just like with any big move to the stock market.
