'Future belongs to the resilient': Mamaearth co-founder Ghazal Alagh celebrates Honasa Consumer listing on stock market

Ghazal Alagh, co-founder and chief innovation officer of Honasa Consumer Limited (HCL), which owns brands like Mamaearth and The Derma Co, celebrated its debut in the stock market on Tuesday. The company's IPO opened for bidding from October 31 to November 2 and comprised a fresh issue of Rs 365 crore and an offer-for-sale (OFS) of up to 4.12 crore equity shares.

The IPO was subscribed overall 7.6 times due to strong interest from institutional bidders. The quota for qualified institutional bidders (QIBs) was booked at 11.50 times, while the portion set aside for non-institutional investors saw 4.02 times bidding.

Walking down memory lane on the day of its market debut, Ghazal Alagh posted on X how she and her husband Varun Alagh started their journey from a small apartment and rose to the stock exchange.

"The sun is shining a little brighter today. From starting up in small apartment to stock exchange, it’s been a journey for @honasa_india. Thank you for believing in us. Together we will achieve much more by continuing to challenge norms and transform industries. The future belongs to the resilient," Ghazal posed on X.

At the end of the first day of trading, Honasa Consumer's shares closed 4.17 per cent higher at Rs 337.50 on the BSE against the issue price of Rs 324. On the other hand, it settled 4.10 per cent up at Rs 337.30 on the NSE. Honasa Consumer had fixed a price range of Rs 308-324 a share.

The Gurugram-based beauty and personal care company's IPO raised a total Rs 1,701 crore, which included a fresh issue of Rs 365 crore and an offer-for-sale (OFS) of up to 4.12 crore equity shares.

Under this, founders Alaghs and other investors Kunal Bahl, Shilpa Shetty, Rishabh Mariwala, offloaded their partial stakes.

On the IPO listing, Ghazal had posted: “We are on a mission to build a pure-play beauty and personal care company out of India, which crafts brands for India and takes them to the world. We are always thinking about how we can leave a legacy through our brands built for India.”

Financials

As per the FY23 results, the company had recorded a net loss of Rs 142.8 crore during the year ended March FY23, compared to a profit of Rs 15.7 crore in the previous fiscal. In FY21, it had a loss of Rs 1,332.2 crore, which was due to the change in the fair valuation of preference shares.

The revenue for the company grew at a CAGR of 80 per cent over FY21-23 with a volume growth of 102.28 per cent.

It has an adjusted EBITDA of 3.4 per cent in FY23 with negative working capital on account of an asset-light model that enables it to invest more in marketing, technology and product innovation.

By the end of FY23, Mamaearth had become the fastest-growing BPC brand in India, achieving an annual revenue of Rs 1,000 crore within six years of its launch.

Products and scope

Honasa Consumer has a product portfolio in the baby care, face care, body care, hair care, colour cosmetics and fragrances segments. The company operates six brands — Mamaearth, The Derma Co, Bblunt, Ayuga, Aqualogica and Dr Sheth. Mamaearth is the flagship brand, bringing in the highest revenue.

The company's founders have previously identified expansion opportunities in priority markets such as the United Arab Emirates, Nepal and Bangladesh, both organically and through strategic acquisitions.

Also read: Mamaearth shares disappoint at debut; Honasa Consumer debuts with 2% premium at Rs 330

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