Honasa Consumer Ltd, the parent firm of D2C brands such as Mamaearth, The Derma Co, and BBlunt, has trimmed its public issue by nearly 10 per cent, according to the company’s red herring prospectus (RHP). The company is set to launch its initial public offering (IPO) on October 31.

According to the RHP, the D2C brand plans to issue fresh shares worth ₹365 crore along with an offer for sale (OFS) of 41.25 million shares. The proceeds of the fresh issue will be lower than the ₹400 crore proposed in the Draft RHP filed in December last year.

Founded in 2016 by the husband-wife duo of Varun Alagh and Ghazal Alagh, the company attained unicorn status when it raised $52 million at a valuation of $1.2 billion in a fundraising round in January 2022, led by VC firm Sequoia Capital.

OFS participation

Several late-stage investors in the company are parting with only a small portion of their stake in the company during the IPO. MamaEarth co-founders Varun and Ghazal will sell part of their stakes, whereas early backers, including Fireside Ventures, Stellaris Venture Partners, Sofina, Snapdeal founders Kunal Bahl and Rohit Bansal, and investor-cum-brand ambassador Shilpa Shetty Kundra, will also participate in the OFS.

Peak XV Partners (formerly Sequoia Capital) will not join the OFS, as per the RHP. Evolvence India, which was willing to participate in the OFS earlier, has also pulled out this time. Sofina intends to offload 9.6 million shares, considerably lower than the originally planned 19.1 million.

Peak XV is the largest external shareholder with 19.38 per cent, followed by Fireside and Stellaris which own 10.38 per cent and 9.45 per cent, respectively. Co-founders Varun and Ghazal have around 37.35 per cent stake.

The D2C firm reported a net loss of ₹151 crore in FY23. It had reported a net profit of ₹14.4 crore in the previous fiscal. Its total operating revenue stood at ₹1,492.7 crore in FY23, from ₹943.4 crore in FY22.

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