Overview
Shares of Honasa Consumer, the parent firm of direct-to-customer beauty and personal care company Mamaearth, jumped slightly in a key public listing watched by many Indian startups as they evaluate their own initial public offerings. The listing marked an important milestone for the seven-year-old startup, which has seen a surge in demand for its products after the pandemic.
Listing Price and Market Cap
Mamaearth ended its debut trading day on Tuesday at 337.50 Indian rupees ($4) per share, above its listing price of 324 Indian rupees ($3.89) on the local exchange. The firm currently has a market cap of $1.3 billion.
Valuation and Backers
The startup was valued at $1.2 billion in early 2022 and counts Peak XV Partners, Fireside Ventures, Stellaris Venture Partners, and Sofina among its backers. In an anchor round last week, the company raised about $92 million from over three dozen asset managers, including Abu Dhabi Investment Authority, Fidelity, Norges Bank, Invesco, and Goldman Sachs.
Speed of Growth
According to Sajith Pai, a partner at Indian venture capital firm Blume, "It is just over five years since the Mamaearth seed round was announced. And the company is listing today. That is incredible speed of growth (and time to listing for a consumer products/brand company)!" He noted that when the round was announced, the company was valued at around 100 crores ($14 million), with revenue-to-valuation multiples still low.
Business Operations
Mamaearth operates a portfolio of six distinct brands, with its eponymous main brand accounting for approximately 80% of its revenue in the fiscal year 2023. The company’s business operations hinge on third-party manufacturing, with no manufacturing IP of its own. Its products reach consumers via an omni-channel network, with online sales delivering 59% of total revenue across nearly 18,600 pin codes.
Revenue and Gross Margin
In the fiscal year 2023, Mamaearth reported revenues of approximately $170 million, with the online channel yielding around 56% of this figure. The company maintains a gross margin of 70%, alongside an adjusted EBITDA margin of 3%.
Offline Sales
Offline sales now represent 36% of the total revenue, marking an increase for the fiscal period. Offline channels contribute to the remaining 41% of sales, spanning over 154,000 retail points, incorporating a mix of traditional and modern trade outlets, exclusive stores, and BBlunt salons.
Competitor Watch
About a dozen other Indian startups are keenly monitoring market conditions as they assess the timing for their initial public offerings. Mamaearth earlier sought a valuation of $3 billion at its public debut but later cut short the target as market conditions worsened.
Market Impact
The listing of Mamaearth is being closely watched by many Indian startups, which are evaluating their own initial public offerings. The success of the listing could have significant implications for the Indian startup ecosystem, providing a benchmark for other startups looking to go public in the future.
Related Articles:
