The IPO includes fresh issuance of shares worth up to Rs 365 crore and an offer for sale (OFS) of about 4.12 crore shares.
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Honasa promoter Varun Alagh will sell 3,186,300 shares while his wife Ghazal Alagh will sell up to 100,000 shares in IPO. Pre-IPO shareholding pattern shows that the promoters own 37.41% stake in the company.
Other shareholders who would be selling stake in the OFS include Kunal Bahl, Shilpa Shetty Kundra, Rishabh Harsh Mariwala, Fireside Ventures Fund, Sofina, Stellaris and Rohit Kumar Bansal.
The bid lot size has been fixed at 46 shares per lot, which implies that the minimum bid lot amount in the retail category would be Rs 14,904. About 10% of the issue size has been reserved for retail investors, 15% has been allocated to the HNIs while the remaining 75% is reserved for qualified institutional buyers (QIB).
Honasa employees will get a discount of Rs 30 per share as well as a reservation of equity shares worth up to Rs 10 crore.
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The stock will get listed on both NSE and BSE on November 10 while the finalisation of the basis of allotment is likely to be done by November 7.Book-running lead managers for the IPO include Kotak Mahindra Capital, Citigroup, JM Financial and JP Morgan.
Net proceeds from the IPO would be spent on advertisement expenses towards enhancing the awareness and visibility of brands, capital expenditure for setting up new EBOs, to set up new salons under its subsidiary Bhabani Blunt Hairdressing, general corporate purposes and unidentified inorganic acquisition.
Financial Snapshot
In the June quarter, the company’s revenue from operations stood at Rs 464.49 crore, up 49% from a year ago. Net profit stood at Rs 9.24 crore, according to filings. In the year-ago quarter, the company had reported a loss of Rs 2.51 crore.
The company has attributed the year-on-year growth in quarterly operating revenue to higher sales under its flagship Mamaearth brand, which accounted for the bulk of its topline.
“Under the Mamaearth brand, we had higher sales of products across the face care, hair care, body care, baby care and colour care categories,” the company said.
In FY23, Honasa reported a net loss of Rs 150.97 crore. In the previous year, it had reported a net profit of Rs 14.44 crore. Its operating revenue, however, increased by 58% year-on-year to Rs 1,492.75 crore.
The consumer company derives a substantial majority of its revenue from operations from the sale of products under the flagship Mamaearth brand. Any decrease in demand for our Mamaearth branded products could have an adverse effect on our business, cash flows and results of operations, it said.
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