Honasa Consumer, which owns the Mamaearth brand, has set a price band of ₹308 to ₹324 per share ahead of its October 31st IPO. The company's management is confident that offline channels will drive Mamaearth's growth, positioning it for significant returns for pre-IPO investors.

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Speaking to CNBC-TV18, Ghazal Alagh, Co-Founder of Honasa Consumer, emphasised the significance of offline channels in driving Mamaearth's growth. She noted, “Now as the brand has scaled what we are following is where is our next set of consumers. Offline still continues to be one of the largest channels. 85% of the purchases in the category still happen offline. The next level of growth, we very strongly believe will continue to come from offline for Mamaearth.”

Varun Alagh, CEO of Honasa Consumer, echoed this sentiment, stating, "Mamaearth is at a level where the next phase of growth is coming from offline. The younger brands are still seeing their growth coming from online because the consumer we are targeting there is still buying online."

Mamaearth has already made significant inroads into the offline retail space, currently present in more than 1,20,000 stores with its leading product categories. The company is committed to doubling down on its offline retail strategy to drive further growth for the brand.

Read Here | Mamaearth plans to launch Rs 1,700 crore IPO by October end

Honasa Consumer, founded in 2016, has expanded its portfolio to include six brands. These include Mamaearth, The Derma Co., Aqualogica, Ayuga, BBLUNT, and Dr. Sheths. While the first four are homegrown brands, the latter two were acquired, showcasing the company's growth and diversification in the personal care and wellness sector.

Among the selling shareholders in Mamaearth's IPO are prominent funds such as Evolvence India, Fireside Ventures, Sofina, and Stellaris, as well as notable individuals like Shilpa Shetty Kundra, who also serves as the brand ambassador for Mamaearth.

Other individuals looking to divest their stakes in the Mamaearth IPO include Kunal Bahl, Rishabh Harsh Mariwala, the son of Harsh Mariwala (Founder and Chairman of Marico), and Rohit Kumar Bansal.

The financial journey of Honasa Consumer has been quite remarkable. The company reported revenues of ₹1500 crore in FY23, a substantial increase from just ₹110 crore in FY20. The journey has not been without its challenges, including a loss of ₹1,300 crore in FY21. However, the company managed to turn the tide with a profit of ₹50 crore in FY22, followed by a loss of ₹150 crore in FY23, and another profit in the first quarter of FY24. It's worth noting that a significant 40% of the company's revenues are allocated to advertising spend.

The IPO, estimated at ₹1,700 crore, is being offered at a price band of ₹308-₹324 per share, which values the company at slightly over ₹10,400 crore. The IPO comprises a fresh issue of ₹365 crore, while the remainder will be an offer for sale from some existing investors.

Also Read:IPO KYC | Honasa Consumer - 10 key questions answered on Mamaearth parent’s initial public offering

First Published:Oct 26, 2023 6:31 PM IST