Mamaearth IPO

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Honasa Consumer Limited is India’s largest digital-first Beauty and Personal Care (BPC) company in India, in terms of revenue from operations for the Fiscal Year 2022. The primary objective of the company has been to develop products that address BPC problems faced by consumers. Its flagship brand, Mamaearth, is built to service a core consumer need for safe-to-use, natural products, and focuses on developing toxin-free beauty products made with natural ingredients. Mamaearth has emerged as the fastest growing BPC brand in India to reach an annual revenue of ₹10 billion, in the preceding 12 months, within six years of launch. Since the launch of Mamaearth in 2016, five additional brands have been added to the company’s portfolio; Derma Co., Aqualogica, Ayuga, BBlunt and Dr. Sheth’s. As of 30 th Sept ‘22, its portfolio comprises of brands with differentiated value propositions: baby care, face care, body care, hair care, color cosmetics and fragrances segments. Honasa Consumer Ltd.’s success with Mamaearth and its ability to identify and cater to emerging trends has enabled it to develop repeatable brand building playbooks, helping it in scaling its newer brands at a fast pace. Moreover, it seeks to connect better with its consumers and strengthen its brand equity by building ‘purpose-driven’ brands that are associated with environmental and social impact causes. For instance, through the Mamaearth ‘Plant Goodness’ initiative, it works with an NGO to plant trees for orders placed on its direct-to-consumer (DTC) platform and share geo-tagged images of these trees with its consumers. Mamaearth is the largest brand in the DTC BPC market in India in terms of revenue generated from the DTC channel in Fiscal Year 2022 (Source: RedSeer Report).


The Offer comprises of a Fresh Issue and an Offer for Sale. The Fresh Issue aggregates up to ₹4,000 million. Out of the net proceeds from the fresh issue, the company will utilize ₹1,860 million for advertising expenses towards enhancing the awareness and visibility of its brands; ₹342.27 million for capital expenditure to be incurred for setting up new exclusive brand outlets (EBOs); ₹275.17 for investment in its subsidiary, for setting up new salons, and the rest for general corporate purposes and unidentified inorganic acquisition. The Offer for Sale is for 46,819,635 Equity Shares, with the company not receiving any proceeds from it.



The company’s revenue from operations has increased from ₹1,097.84 million in Fiscal 2020 to ₹9,434.65 million in Fiscal 2022, putting forth a CAGR of 193.15%. The company’s EBITDA increased from (₹4,317.14 million) in Fiscal 2020 to ₹114.59 million in Fiscal 2022. PAT increased from (₹4,280.26 million) in Fiscal 2020 to ₹144.43 million in Fiscal 2022. Positive EBITDA and PAT were registered in the Fiscal Year 2022, against the losses suffered in Fiscal Years 2020 and 2021.


(`₹ in millions)FY20FY21FY22
Revenue from Operations1,097.844,599.909,434.65
EBITDA Margin (on total income)(393.24%)(290.01%)1.21%


Brand building and repeatable playbooks

Millennials in India are becoming increasingly conscious of their beauty and personal care needs and the brands they consume (Source: RedSeer Report). Moreover, they are also more acutely oriented towards new-age innovations that cater to their specific needs and preferences, as compared to mass market propositions that cater to more mainstream or functional need spaces (Source: RedSeer Report). Given Honasa Consumer Ltd.’s customer-centric approach, it has responded to this changing consumer dynamic and has introduced new BPC brands and products in its portfolio over the last six years. According to the RedSeer Report, it launched at least 2.6 times the number of new Stock Keeping Units (SKUs) than the BPC industry median in Fiscal Year 2022. This ability to successfully introduce new innovations and conceptualize and build new brands has been and is expected to continue to be critical to its success. According to the RedSeer Report, as of September 30, 2022, its flagship brand, Mamaearth has emerged as the fastest growing BPC brand in India to reach an annual revenue of ₹10 billion (in the preceding 12 months) within six years of launch and was India's largest digital-first BPC brand in terms of revenue in Fiscal Year 2022.

Consumer-centric product innovation

Honasa Consumer Ltd. has made continuous consumer listening and engagement model a key ingredient of its product innovation. The summary of its key innovation are social listening, online competitive intelligence and user conversational research (UCR).

1.Social Listening: Its in-house social listening and tracking platform enables it to proactively capture consumer sentiments and identify emerging trends and propositions both in India and globally. This has helped it in identifying emerging propositions such as rice water for frizzy hair and green tea for open pores, with product launches in November 2020 and August 2022, respectively.

2.Online Competitive Intelligence: Its in-house market research and competitive intelligence platform for e-commerce, enables it to track market share movements across a number of BPC sub-categories and a long range of ingredient spaces and price points.

3.User Conversational Research (UCR): The company’s two-way consumer engagement digital platform, UCR, enables it to directly converse with users through quick surveys and polls launched on its own brand websites and apps. It gives it the flexibility to conduct iterative research across all phases of a new product development lifecycle including identification of new product concepts, defining the right formulation and packaging, and developing the right positioning and messaging for each launch.

Digital-first omnichannel distribution

Honasa Consumer Ltd.’s omnichannel network allows it to be present across various touch points and serve its consumers wherever they shop. The distribution model is led by its digital presence (DTC and e-commerce marketplaces), from which it derived ₹6,595.34 million and ₹4,291.15 million of revenue, accounting for 69.91% and 59.37% of its total revenue from operations from all its brands during the Fiscal Year 2022 and the six months period ending 30 th Sep ‘22, respectively. According to the RedSeer Report, Honasa Consumer Ltd. has established scale across both online and offline channels and recorded the highest revenue from offline channels among digital-first BPC companies in India in Fiscal Year 2022. It has adopted a digital-first approach to its distribution strategy wherein it first incubates new brands on its online channel, and then selectively introduces them in the offline channel.

Data-driven contextualised marketing

Honasa Consumer Ltd.’s has adopted a marketing model through which it activates consumer engagement initiatives across multiple media platforms and channels. With a combination of digital and traditional marketing, it delivers a consistent narrative about its brands and its proposition across all touch points relevant for its consumers. Through these initiatives, it aims at targeting consumers across the entire marketing funnel from creating awareness to driving consideration and conversion for its brands. Its marketing capabilities are reflected in its content- community-commerce framework that enables it to deploy contextualized data-led marketing to its consumers. It has leveraged its extensive data libraries to segment consumers into micro- cohorts to drive contextualized nano-targeting and engagement. This has led to better consumer engagement, larger conversion funnels and transactions that further strengthens its data capabilities.

Ability to drive growth and profitability in a capital efficient manner

Honasa Consumer Ltd. is the largest digital-first BPC company in India in terms of revenue from operations for the Financial Year 2022 (Source: RedSeer Report). It has grown its revenue from operations at a CAGR of 193.15% between Fiscal Years 2020 and 2022, while the median revenue CAGR of all other BPC companies, for which data was available for the relevant period, was 13% (Source: RedSeer Report). Moreover, its growth has been driven by increase in volumes. For the Fiscal Year 2022 and the six months period ended 30 th Sept ‘22, its number of units delivered, across all its brands, was 45.02 million and 36.43 million, growing by 143.30% and 61.81% in such period, respectively. While it continues to focus on growing its business, it is focused on driving profitable unit economics. This has translated into an efficient business model and Honasa Consumer Ltd. was ranked second amongst digital-first BPC companies in India in terms of gross profit margins in Fiscal Year 2021 (Source: RedSeer Report). It has strategically built an asset-light scalable business model by developing in-house capabilities for functions such as technology, product innovation and marketing while outsourcing other operations such as manufacturing.


  • a.Brand building capabilities and repeatable playbooks.

  • b. Product innovation powered by its continuous consumer listening and engagement model is a key strength of its business.

  • c.Digital-first omnichannel distribution allows it to be present across various touchpoints and serve its consumers wherever they shop.

  • d.Ability to drive growth and profitability in a capital efficient manner.


  • a.Undertakes no manufacturing by itself, instead relies solely on third-partymanufacturers.

  • b.Heavy reliance on third-party for sales and distribution of its products and technology infrastructure.

  • c.Derives a significant amount of revenue from a limited number of products.


  • a.Growing importance of natural and herbal products amongst the population, not only amongst the Indian population, but all around the world, will help the company.

  • b.The market for BPC products in India is expected to grow from approximately US$17 billion in 2021 to approximately US$30 billion in 2026 at a CAGR of approximately 12%, which is among the highest within the broader retail categories.


Expand distribution and brand awareness

Honasa Consumer Ltd. plans to continue to improve brand awareness amongst target consumers, and expand offline footprint to reach a larger customer base. It intends to invest in innovative brand building and performance marketing initiatives to drive awareness and generate trials for its brands. It intends to focus on deploying a holistic marketing strategy across digital, social, and traditional platforms and actively leverage its differentiated content, community, and commerce flywheels to improve its reach and drive effective engagement to acquire new consumers. Moreover, to support its offline expansion plans, it intends to differentially focus on other modes of advertising, including television advertising, to reach and target a larger consumer base. In India, the offline channel contributed to 85% of the BPC products market in India, in terms of revenues (Source: RedSeer Report). Given the size of this channel, it considers it critical for the company to continue to strengthen its offline channel and reach its target consumers. The company intends to strategically leverage the offline channel to drive household penetration for mainstream BPC categories such as shampoo, hair oil and face washes.

Incubate or acquire new engines of growth

Honasa Consumer Ltd. plans to focus on launching new brands and continue to drive product innovations across existing brand, develop new channels and strengthen its omni-channel strategy, and selectively seed and incubate new markets. The company intends to incubate or acquire new brands across new value propositions and price points, along with entering new categories in the BPC spectrum and raise market share. It plans to open new Mamaearth EBOs Strategies going forward across a mix of mall stores and high street outlets in India. Its acquisition of BBlunt in Mar ‘22 has raised its plans to expand its salon footprint and build on these positive synergies for its products business. The company’s focus will continue to be on India in the medium term, along with other priority markets such as the United Arab Emirates, Nepal, and Bangladesh. This will be undertaken through strategic acquisitions.

Strengthen business efficiency drivers

Honasa Consumer Ltd. intends to optimise channel mix for mature brands, drive scale benefits from core business, and strengthen its technology and data capabilities to drive business efficiencies. In line with its distribution strategy, it plans on driving growth for its flagship brand, Mamaearth, in the offline channel. Its share of revenue from operations from the offline channel across all its brands has increased from 9.06% (₹99.41 million) during the Fiscal Year 2020 to 35.39% (₹2,557.62 million) in the six months period ended 30 th Sep ‘22. Going forward, it intends to continue to grow its share of business from the offline channel. Given that the sale of BPC products through offline channels tends to be more profitable as compared to online channels (Source: RedSeer Report), expansion into offline channels will assist improve the overall margin profile of its business. The company intends to continue to invest in its technology and data capabilities to drive business efficiencies, stay connected with its consumers and strengthen cross-band, cross-functional synergies. Furthermore, its focus is to refine its personalisation engine to deliver a more tailored, contextualised experience to its users, deepen brand connect and drive consumer retention and repeat.

Disclaimer -

The content on this page is made available on the basis of the DRHP (draft red herring prospectus ) filed by Honasa Consumer Ltd. The final content could change based on the Red Herring Prospectus (RHP) filed

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