Mamaearth IPO (Honasa Consumer Limited IPO) began accepting applications on October 31, 2023. Honasa Consumer Limited offers beauty and personal care products through digital platforms. The company has been generating strong profits in recent years.Should you invest? Mama Earth IPO? In this article: Honasa Consumer Limited IPO (Mama Earth IPO) ReviewIPO details, risk factors and positive aspects useful for investors considering investing.
Mamaearth IPO dates and key details
|IPO start date||October 31, 2023|
|IPO deadline||November 2, 2023|
|IPO listing date||November 10, 2023|
|Type of problem||Book Built Issue IPO|
|face value||10 rupees per share|
|IPO price range||308 to 324 rupees per share|
|lot size||46 stocks|
|Exhibition location||BSE and NSE|
|Total issue size||Rs. 170.1 billion yen|
|Latest issue||Rs. 365 million|
|OFS||Rs. 133.6 billion yen|
|employee discount||30 rupees per share|
Mama Earth IPO timetable
|IPO start date||October 31, 2023|
|The IPO will close in||November 2, 2023|
|Basis for allocation||November 7, 2023|
|Initiate refund||November 8, 2023|
|Credit of shares to Demat.||November 9, 23|
|Listing date||November 10, 2023|
|Deadline time for UPI obligation confirmation||November 2, 2023 – 5:00 p.m.|
About Honasa Consumer Limited
Founded in 2016, Honasa Consumer Limited (HCL) started selling beauty and personal care products over the internet.
HCL is a company built on values such as integrity, natural ingredients, and safety. The company serves over 500 cities in India and has its own brands such as Mamaearth, The Derma Co., Aqualogica, Dr. Sheth’s, and Ayuga. They also invested in BBLUNT and Momspresso.
Backed by Sequoia Capital India, Sofina SA, Fireside Ventures and Stellaris Venture Partners, HCL aims to become a $1 billion company. As of June 30, 2023, we are developing products such as baby care, face care, body care, hair care, makeup, and fragrance. The company is good at creating new products and has a variety of ways to sell them both online and in stores.
Honasa Consumer Limited – Main Strengths
- Brand building capabilities and repeatable strategies
- Consumer-centric product innovation
- Digital-first omnichannel delivery
- Data-driven, contextual marketing
- our ability to drive growth and profitability in a capital efficient manner;
- Founder-led company with strong professional management Skilled and experienced management team
Honasa Consumer Limited – Financial Insights
|Fiscal year end/period end (amount in billions)|
|Period ends||March 31, 2021||March 31, 22||March 31, 23||June 30, 2023|
|Profit after tax||-1,324.61||14.44||-150.97||24.72|
|reserves and surplus||-1,087.33||-1,323.32||-1,290.94|
|Total loan amount||3.59||3.61||6.79|
Target of IPO
The IPO size is 1.71 billion rupees, which consists of OFS (Offer for Sale) and new issue.
1st place – OFS 1,336 billion rupees – Under OFS, that money is used to sell shareholders and the company gets nothing.
#2 – New issue of Rs 365 million – This is used for:
- Advertising expenses to increase awareness and recognition of the company’s brand.
- Capital expenditure incurred by the company to establish a new EBO.
- Investment in Bhabani Blunt Hairdressing Private Limited (“BBlunt”), a subsidiary of the Company, for the establishment of a new salon.and
- General corporate purposes and unidentified inorganic acquisitions.
Mama Earth IPO Price Rating
- The IPO price range is between Rs 308 and Rs 324 per share.
- Last year’s FY23 EPS was negative, so we can’t calculate the P/E ratio based on this.
- The weighted average EPS for the past three years is negative, so we can’t calculate the P/E ratio based on this either.
- Annualized by taking into account EPS for the three months ending June 2023, the P/E ratio is 97x.
- Publicly traded peers such as Procter & Gamble have a P/E ratio of 83 times (highest), Bajaj Consumer Care has a P/E ratio of 25 times (lowest), and the industry average P/E ratio is 54 times. It may not be appropriate to make a comparison considering only June 2023 quarter earnings EPS, but considering that, the IPO price is too high.
Positive factors of Mama Earth IPO
- The company has superior brand-building capabilities, repeatable strategies, and consumer-centric product innovation
- Revenues have increased significantly over the past 3 years
Negative or risk factors in this IPO
- The company has suffered losses in the past. It generated a profit in the quarter that ended June 23. There is no guarantee of future profits.
- The majority of IPO stocks include OFS. Under OFS, the funds are used to sell shareholders and the company does not make a profit.
- IPO prices are expensive.
- If we are unable to timely identify and effectively respond to changes in consumer preferences and spending patterns, as well as changes in beauty and personal care trends, demand for our products may be adversely affected and our business, results of operations, financial condition and cash This can have a negative impact on flow.
- Our brand and reputation are critical to the success of our business and can be adversely affected for a variety of reasons, which could adversely affect our business, financial condition, cash flows and results of operations.
- If our new brand or product launches fail, our growth plans could be affected and our business, financial condition, cash flows and results of operations could be adversely affected.
- The company does not manufacture any of its own products and relies entirely on third-party manufacturers to manufacture all of its products. Our reliance on third-party manufacturers for the manufacture of all of our products involves risks that, if realized, could adversely affect our business, results of operations, cash flows and financial condition.
- They earn a lot of money from a limited number of products. A decline in sales of the company’s major products could have an adverse effect on the company’s business, cash flows, financial condition and results of operations.
- A significant portion of our operating revenues are derived from sales of products under our flagship Mama Earth brand. A decrease in demand for Mamaearth branded products could have an adverse effect on the company’s business, cash flows and results of operations.
- Investors should read both the internal and external risk factors presented in the RHP.
Mamaearth IPO GMP (Gray Market Premium)
This script does not perform offline trading. GMP is nothing but the premium at which these stocks are traded in the offline market.
Mamaearth IPO Review – Should you invest or avoid?
After reading the pros and cons, you may be wondering whether you should apply for this IPO or not.
This IPO has several positive aspects, including an established brand name and strong revenue growth.
However, on the downside, the company has suffered losses in the past. The IPO price is also very high. The bulk of the IPO proceeds will go to OFS, which will be used for shareholder sales. Investors can also view all internal and external risk factors and company details at: Mama Earth IPO RHP.
Some stock market veterans like Dilip Davda want to participate in this IPO, but I personally stay away from this IPO.