Honasa Consumer IPO: Mamaearth's parent firm loses steam in grey market amid market selloff

Honasa Consumer, the parent company of Mamaearth, is feeling the wrath of the broader sell-off as the company has lost its ground in the grey market. Despite the euphoria for the upcoming offering, the director-to-consumer (D2C) player's premium in the unofficial market has seen a mild correction in the last 24-hours.

Last heard, shares of Honasa Consumer were commanding a premium of Rs 35-40 apiece in the grey market, which was around Rs 45-50 on Tuesday. However, the company is yet to declare its official price band, but the street is expecting it to be around Rs 330-360 per share.

Honasa Consumer IPO will open for subscription on Tuesday, October 31, 2023 and can be subscribed till Thursday, November 2, 2023. The issue includes a fresh share sale of Rs 365 crore, while existing promoters and shareholders will offload 4,12,48,162 crore equity shares via offer for sale (OFS) route.

The proceeds from the fesh share sale shall be utilized towards advertisement expenses, capital expenditure  Investment in the company's subsidiary- Bhabani Blunt Hairdressing, general corporate purposes and unidentified inorganic acquisition. According to some media reports, the company is likely to raise Rs 1,750 crore at a valuation of Rs 10,500 crore.

Incorporated in 2016, Honasa Consumer provides beauty and personal care products through its digital platform and currently serves over 500 cities in India. The company's product portfolio includes baby care, face care, body care, hair care, color cosmetics, and fragrances as of June 30, 2023.

The company has grown several consumer brands internally including Mamaearth, The Derma Co, Aqualogica, Dr. Sheth's, and Ayuga. It has recently acquired shares in BBLUNT and the content platform Momspresso. The company became a unicorn after it raised $52 million by VC firm Sequoia Capital at a valuation of $1.2 billion.
 

Kotak Mahindra Capital Company, Citigroup Global Markets India, Jm Financial and JP Morgan India are lead managers for the issue and Kfin Technologies have been appointed as the registrar for this IPO. Shares of the company will be listed on both BSE and NSE. 

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