Mamaearth, a Gurugram-based startup which manufactures and sells personal care products, has filed a draft red herring prospectus (DRHP) with markets regulator Sebi to raise funds through an initial public offering (IPO).
The direct-to-consumer (D2C) startup’s IPO will comprise fresh issue of equity shares aggregating up to Rs 400 crore and an offer for sale (OFS) of up to 46,819,635 equity shares by existing investors, including Evolvence India, Fireside Ventures, Sofina, Stellaris and others. The face value of each equity share would be Rs 10 each.
The OFS includes 3,186,300 equity shares by co-founder Varun Alagh and another 100,000 by co-founder and wife Ghazal Alagh. The IPO also includes a reservation of equity shares, aggregating up to Rs 10 crore, for subscription by Mamaearth employees, the DRHP added.
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The startup, whose parent firm is Honasa Consumer, proposes to utilise the net proceeds from the fresh issue towards advertisement expenses (Rs 186 crore), capital expenditure for setting up new brand outlets (Rs 34.23 crore), and for investing cash in its subsidiary BBlunt (Rs 27.52 crore).
Mamaearth attained the unicorn status in 2022 when the firm raised $52 million at a $1.2-billion valuation in a fundraising round led by Sequoia Capital. However, Sequoia is not planning to sell its stake in the public offering, according to the DRHP.
The book-running lead managers for the IPO are Kotak Mahindra
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Honasa Consumer has six brands under its umbrella, including its flagship company, Mamaearth. Mamaearth has emerged as one of the fastest-growing D2C brands in the country. The startup estimates the market for personal care products to grow from approximately $17 billion in 2021 to approximately $30 billion in 2026 at a CAGR of around 12%, which is among the highest within the broader retail categories, according to its DRHP. Honasa Consumer reported a net profit of Rs 14.44 crore in FY22 and its net revenue grew to Rs 934.46 crore from Rs 456 crore in FY21.