Mamaearth parent files for IPO, issue size to be nearly Rs 400 cr

Parent of Indian personal care products startup Mamaearth, Honasa Consumer Ltd, on Thursday filed for an initial public offering (IPO), according to draft papers submitted to the market regulator.

The Sequoia- and Sofina-backed company's IPO will comprise of a fresh issue of shares worth Rs 399 crore ($48.30 million) and an offer for sale of 46.8 million shares.

Mamaearth was co-founded as a direct-to-consumer brand by Varun Alagh, a former Hindustan Unilever executive, and his wife Ghazal.

With the brand endorsed by popular Bollywood celebrities, the duo has cashed in on India's growing e-commerce adoption by offering its products on platforms such as Amazon and Walmart's Flipkart.

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India's beauty and personal care industry is expected to grow to Rs 2,27,685 cr ($27.5 billion) by 2025 from Rs 1,47,420 ($17.8 billion) in 2020, according to estimates by Indian financial services firm Avendus.

The number of online shoppers for beauty products is also projected to rise, climbing to 135 million from 25 million during that period, it added.

Reuters had reported in June that Mamaearth was in talks to raise at least Rs 2,483 cr ($300 million) for the IPO scheduled for 2023.

The company was last valued at Rs 9,935 cr ($1.2 billion) in January 2022 when it raised Rs 430 cr ($52 million) from investors, including US-based Sequoia and Belgium's Sofina.

Investors including Sofina, Stellaris Venture Partners, Fireside Ventures, and Bollywood actor Shilpa Shetty are among those selling their stake in Honasa via the offer for sale.

Honasa said it would use about Rs 180 cr from the IPO for advertising expenses.

Kotak Mahindra Capital, Citigroup Global Markets India, JM Financial Ltd, and J.P. Morgan India Private Ltd are the book-running lead managers for the issue. ($1 = 82.81 Indian rupees)