Honasa Consumer Ltd, the company behind popular FMCG brands Mamaearth and The Derma Co, is set to launch its initial public offering (IPO) in late October or early November. This comes after nearly a year of anticipation from Dalal Street, the Indian financial hub. The company had initially filed its Draft Red Herring Prospectus (DRHP) in December 2022.
The IPO’s size remains steady at Rs 1,700 crore, with Rs 400 crore earmarked for a fresh issue and the remaining amount for an offer for sale by existing shareholders. The equity issuance is expected to be around 15%, resulting in an estimated valuation of approximately Rs 11,000-11,500 crore. This valuation is notably lower than the earlier speculated figure, which had surpassed Rs 22,000 crore.
Honasa Consumer Ltd has gained prominence through its FMCG brands, especially Mamaearth, which has carved a niche in the market with its focus on natural and organic products. The company’s foray into the public market is anticipated to attract significant attention, given the popularity of its brands and the growth potential in the FMCG sector.
The IPO will provide the company with an opportunity to raise capital for its expansion plans and further strengthen its market position. The allocation of funds for a fresh issue suggests that Honasa Consumer aims to deploy the capital for various growth initiatives, possibly including product innovation, market expansion, and brand building.
As the IPO plans progress, market participants and investors will closely scrutinize the details provided in the DRHP to assess the company’s financial health, growth prospects, and valuation. The success of the IPO will likely depend on the confidence it instills in investors regarding the company’s ability to navigate the competitive FMCG landscape and capitalize on evolving consumer preferences.
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