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<ul><li>Honasa Consumer plans to raise ₹400 crore from fresh issue of equity shares and an offer for sale (OFS).</li><li>Co-founders of Mamaearth Varun and Ghazal Alagh, <keyword id="15915113" type="General" weightage="20" keywordseo="Snapdeal-founder-Kunal-Bahl" source="Orion">Snapdeal founder Kunal Bahl</keyword>, Bollywood actress <keyword id="6358615" type="General" weightage="20" keywordseo="shilpa-shetty" source="Orion">Shilpa Shetty</keyword> Kundra are among the shareholders who will sell stake via the IPO.</li><li>After launching Mamaearth in 2016, the company has added five new brands to its portfolio – <keyword id="10820965" type="General" weightage="20" keywordseo="The-Derma-Co" source="Orion">The Derma Co</keyword>., Aqualogica, Ayuga, <keyword id="2615227" type="General" weightage="20" keywordseo="BBlunt" source="Orion">BBlunt</keyword> and Dr Sheth’s. </li></ul>Digital-first beauty and personal care company Honasa Consumer, parent company of popular brands such as Mamaearth, BBlunt, Derma Co etc. may soon launch its initial public offering (IPO). It has filed its draft red herring prospectus (DRHP) with market regulator SEBI to raise funds through an IPO. As per the DRHP, the company plans to raise ₹400 crore from fresh issue of equity shares, and will sell up to 4.68 crore equity shares via an offer for sale (OFS), wherein promoters and shareholders will sell their stake. The shareholders who will sell stake in the company include co-founders of Mamaearth Varun and Ghazal Alagh; Snapdeal founder Kunal Bahl, Bollywood actress Shilpa Shetty Kundra, Sofina Ventures SA, Evolvence, Fireside Ventures, Stellaris Venture Partners among others. The company intends to utilize net proceeds from the IPO towards advertisement expenses to enhance the awareness and visibility of its brands, capital expenditure for setting up new exclusive brand outlets (EBOs), and investment in its subsidiary, BBlunt for setting up new salons. Ghazal Alagh was also a judge on Shark Tank India Season 1, a reality show where entrepreneurs pitch ideas for a business or product to raise money from judges. The unicorn heads for an IPO The company received its unicorn status in January 2022, and was one of the first to achieve the $1 billion valuation for the calendar year. After launching Mamaearth in 2016, the company has added five new brands to its portfolio, namely The Derma Co., Aqualogica, Ayuga, BBlunt and Dr Sheth’s. Its portfolio now includes products across baby care, face care, body care, hair care, colour cosmetics and fragrances. The company has set up a dedicated in-house start-up team called ‘Brand Factory’ that works with founders for end-to-end ideation, incubation and execution of new brands. Further, the company has to constantly follow up on changing consumer preferences, spending patterns, changing beauty and personal care trends to grow in the direct-to-consumer space. The company faces various forms of unfair trade practices, such as the sale of counterfeit, cloned, lookalike and pass-off products. “In the past, we have experienced incidents of passing-off and the sale of counterfeit products. The sale of counterfeit, cloned and pass-off products may result in heightened public reputation risk for us along with possibility of legal and regulatory claims,” said the company. Reliance on celebrities and social media influencers as part of its marketing strategy may adversely affect its business and demand for services, says the company in its DRHP. “We face intense competition which may lead to a reduction in our market share, cause us to increase our expenditure on marketing and promotion as well as cause us to offer discounts, which may result in an adverse effect on our business and a decline in our profitability,” said the company. While Honasa Consumer’s revenue has been increasing significantly, its profitability was impacted sharply in the last three financial years. <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Particulars </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Total income </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Net profit </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY22 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹964.34 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹14.44 crore </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY21 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹472.10 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-₹1,332 crore </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY20 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹114.16 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-₹428 crore </td></tr></tbody></table>Source: DRHP The company says it has witnessed net cash outflows from operating activities primarily due to increases in working capital requirement as a result of an increase in the scale of business and the shift in channel mix towards offline channel. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/recession-will-be-an-opportunity-for-it-services-firms-focused-on-transformation-as-per-mphasis-ceo/articleshow/96544373.cms">“Recession will be an opportunity for IT services firms focused on transformation” - Mphasis CEO</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/entertainment/news/as-the-year-ends-tollywood-mourns-the-loss-of-legends-like-krishna-krishnam-raju-and-more/articleshow/96573301.cms">As the year ends, Tollywood mourns the loss of legends like Krishna, Krishnam Raju and more</a>

Shilpa Shetty, Kunal Bahl, promoters to sell stake as Mamaearth parent goes in for an IPO

New Delhi, <keyword id="4549708" type="General" weightage="20" keywordseo="honasa-consumer" source="Orion">Honasa Consumer</keyword> Ltd, which owns new-age FMCG brands like <keyword id="4548811" type="General" weightage="100" keywordseo="mamaearth" source="Orion">Mamaearth</keyword> and The Derma Co, is set to launch its Initial Public Offering (IPO) on October 31. The issue will conclude on November 2 and the anchor book of the offer will open for a day on October 30, according to the red herring prospectus. The IPO comprises a fresh issue of equity shares worth Rs 365 crore and an Offer for Sale (OFS) component of 4.12 crore equity shares by promoters, investors, and other selling shareholders. Those offering shares in the OFS include promoters and founders -- Varun Alagh and Ghazal Alagh -- and investors like Fireside Ventures Fund, Sofina, Stellaris, Kunal Bahl, Rohit <keyword id="252288" type="General" weightage="80" keywordseo="kumar-bansal" source="Orion">Kumar Bansal</keyword>, <keyword id="19259895" type="General" weightage="80" keywordseo="rishabh-harsh-mariwala" source="Orion">Rishabh Harsh Mariwala</keyword> and Bollywood actor <keyword id="6358615" type="General" weightage="80" keywordseo="shilpa-shetty" source="Orion">Shilpa Shetty</keyword> Kundra. Proceeds from the fresh issue would be utilised towards advertising expenses to improve awareness and brand visibility, setting up new exclusive brand outlets, investment in its subsidiary BBlunt for setting up new salons, general corporate purposes, and inorganic acquisition. The Gurugram-based beauty and personal care company was founded in 2016 by husband-wife duo Varun and Ghazal Alagh. It began with the launch of Mamaearth and over the years added five more brands to its portfolio, including The Derma Co, Aqualogica, Ayuga, BBlunt, and Dr Sheth's, and built a 'House of Brands' architecture. In January 2022, the company entered the unicorn club. Kotak Mahindra Capital Company, Citigroup Global Markets India, JM Financial and JP Morgan India Pvt Ltd are the book-running lead managers to the issue. The equity shares of the company will be listed on the BSE and NSE.

Mamaearth's parent firm Honasa Consumer IPO to open on Oct 31

<ul><li><keyword id="4548811" type="General" weightage="20" keywordseo="mamaearth" source="Orion">Mamaearth</keyword> parent Honasa Consumer plans to raise as much as ₹1,701 crore via an <keyword id="6354763" type="General" weightage="20" keywordseo="ipo" source="Orion">IPO</keyword>.</li><li>The price band is fixed at ₹308-324, and the IPO will open on October 31 and close on November 4.</li><li>The company intends to use net proceeds towards ad expenses, set-up outlets, and others. </li></ul>House of brands Honasa Consumer is planning to raise as much as ₹1,701 crore from its maiden public offer. The IPO of the parent company of Mamaearth brand will open on October 31 till November 4. The price band for the issue has been fixed at ₹308-324. Investors can bid for a minimum of 46 shares in multiples thereof. The issue is a combination of a fresh issue and an offer-for-sale. Some of its selling shareholders include its celebrity investor and actress Shilpa Shetty, Snapdeal’s Rohit Kumar Bansal and Kunal Bahl; and Rishabh Harsh Mariwala of the Marico family. This is apart from promoters Varun and Ghazal Alagh, Fireside Ventures Fund, Sofina and Stellaris. The company intends to use net proceeds from the fresh issue towards advertisement expenses, to set-up exclusive brand outlets, investment in its subsidiary, BBlunt, general corporate purposes and unidentified inorganic acquisitions. The issue allocates 10% of the offer to retail investors, 15% to non-institutional investors and 75% to qualified institutional buyers (QIBs). Kotak Mahindra Capital, Citigroup Global, J M Financial and J P Morgan are the book running lead managers of the issue and KFIn is the registrar. Loss on account of impairment The company has reported a progressive growth in revenue for the last three years. It slipped back into losses in FY23, after posting profits in FY22. It was due to an impairment loss it had to take in the last financial year to the tune of ₹154 crore. “This was primarily due to the management decision to scale down the majority of the business verticals of Momspresso, a content platform operating under our subsidiary, Just4Kids Services, and acquired by us in December 2021,” the company said. <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Particulars </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY23 (consol) </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY22 (consol) </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY21 (standalone) </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Revenue from operations </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹1,492 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹943 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹459 crore </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Restated Profit/Loss </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">(₹150.9 crore)* </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹14.4 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">(₹1,332 crore) * </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table>Source: RHP * it represents a loss A top heavy profile While the BPC D2C brand has a wide array of products, most of its revenues depend on top 10 products. As of June 2023 end, a third of revenues from operations or around 29% of revenues came from these products. “While our dependence on sales of our top 10 products has been declining with increasing contributions from our other products, any decrease in the sales of our top 10 products, whether due to increase in sale of products or market share of competitors with similar products or any other reason, will adversely affect our business, results of operations, financial condition and cash flows,” the company said. Its top products include the Mamaearth brand, the Derma Co, Dr Sheth’s, and Aqualogica brands in the face care and hair care categories. Around 9% of its revenues came from the same two products. Moreoso, the auditor’s report on internal financial controls issued on its standalone financial statements in FY21 contains a disclaimer of opinion. The opinion relates to the auditors’ inability to obtain appropriate audit evidence to provide a basis for opinion on adequate internal financial controls. The company which depends on influencers also sees them as a business risk. “Influencers may use their platforms to communicate directly with our consumers without our knowledge in a manner that reflects poorly on our brands and may be attributed to us,” Honasa said. The company sells its products via its own D2C channel like its brand and mobile websites, and mobile applications. But its third party e-commerce marketplaces bring in the most sales. As of June 2023 end, it derives 64% of its revenue from operations from e-commerce marketplaces. High ad expenses &amp; heightened competition The company’s ad expenses stood at 34.99% of its revenue from operations as of June end. The company is also in a segment that’s extremely competitive. And some of these competitors are larger and have substantially greater resources than them. That gives them the ability to spend more on advertising and marketing and offer substantial discounts, the company says. Then, there is also the threat of new entrants which may have more flexibility in responding to changing business and economic conditions. “As the BPC products space has a fairly low barrier to entry, these new entrants could potentially heighten the competitive landscape, which may lead to intensified competition on pricing,” the company said. It also said that its subsidiaries acquired in the past, including Just4Kids, BBlunt, B:Blunt Spratt and Fusion, have incurred losses for certain historical periods. There is no assurance that these entities will be profitable in the future,” the company cites as its risk factors. The company has undertaken one criminal and three material civil proceedings. It has two tax and two material civil litigations proceeding against it, where the aggregate amount involved is ₹100 crore.

India’s largest D2C beauty company to raise ₹1,701 crore via an IPO

<ul><li>QIBs bid aggressively for the issue on the last day, but its retail book was just about fully subscribed.</li><li>Company has raised as much as ₹765 crore from the anchor investors ahead of its IPO.</li><li>It plans to use net proceeds from the IPO towards ad expenses, set-up brand, invest in subsidiaries and more.</li></ul>Mamaearth’s parent company, Honasa Consumer’s initial public offer was subscribed 7.6 times the shares on offer – with good interest from institutional investors. Qualified institutional buyers (QIBs) stepped up on the last day and this portion was subscribed 11 times on Thursday. While the non-institutional investor portion was subscribed four times over, the retail book was just about fully subscribed with 1.3 times over the shares on offer. The ₹1,701 crore issue had allocated only 10% of the offer to retail investors, 15% was for non-institutional investors and 75% to qualified institutional buyers (QIBs). Its price band for the issue has been fixed at ₹308-324. Investors can bid for a minimum of 46 shares in multiples thereof. The company raised as much as ₹765 crore from the anchor investors ahead of its IPO. Some of its investors include Abu Dhabi Investment Authority (ADIA), Goldman Sachs Singapore and more. <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Type of investor </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">No of times subscribed </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Qualified Institutional Buyers </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">11.5 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Non-institutional Investors </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">4.02 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Retail </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1.35 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Total </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.61 </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table>Source: BSE An acid test for D2C brands Honasa Consumer is a house of brands in the beauty and personal care space. It has incubated brands like Mamaearth and has also inorganically grown by acquiring BBlunt salons.It has brands like The Derma Co, Dr Sheth’s, Aqualogica and Ayuda in its kitty. The company intends to use net proceeds from the fresh issue towards advertisement expenses, to set-up exclusive brand outlets, investment in its subsidiary, BBlunt, general corporate purposes and unidentified inorganic acquisitions. The company slipped back into losses in FY23, after posting profits in FY22. It was due to an impairment loss it had to take in the last financial year to the tune of ₹154 crore. “This was primarily due to the management decision to scale down the majority of the business verticals of Momspresso, a content platform operating under our subsidiary, Just4Kids Services, and acquired by us in December 2021,” the company said. Its ad expenses stood at 34.99% of its revenue from operations as of June end. Apart from that, it’s in a segment that’s extremely competitive. Some of these competitors are larger and have substantially greater resources than them. That gives them the ability to spend more on advertising and marketing and offer substantial discounts, the company quotes as risk factors in its RHP. “The revenue for the company has grown at a CAGR of 80% over FY21-23 with a volume growth of 102.28%. The company has an adjusted EBITDA of 3.4% as on FY23 with negative working capital on account of asset light model that enables them to invest more on marketing, technology and product innovation,” says a report by Canara Bank Securities that gave it a ‘subscribe for the long-term’ rating.

Honasa Consumer IPO subscribed 7.6x with aggressive QIB push

<ul><li>The stock listed at ₹334 as compared to its issue price of ₹324.</li><li>The grey market was expecting 9% listing gains from the stock.</li><li>Its marketcap is at ₹10,424 crore as per Bombay Stock Exchange. </li></ul>Mamaearth’s parent Honasa Consumer made its D-street debut at a 3% premium on Tuesday morning. The stock listed at ₹334 as compared to its issue price on BSE. The stock gained during the trading session, and closed the debut day with 4% listing gains. The grey market is expecting 9% listing gains from the stock. Analysts pegged its listing price to be anywhere between ₹314-344. Its marketcap is at ₹10,424 crore as per Bombay Stock Exchange. Honasa’s initial public offer was subscribed 7.6 times the shares on offer – with good interest from institutional investors. But its retail book was just about fully subscribed with 1.3 times over the shares on offer. The company raised as much as ₹765 crore from the anchor investors ahead of its IPO. Some of its investors include Abu Dhabi Investment Authority (ADIA), Goldman Sachs Singapore and more. The listing of Honasa will be seen as an acid test for D2C companies in the public markets. On other hand, the listing gains of most IPOs have also tapered out with D-street giving mixed listing gains amidst volatile markets. Here are the listing gains of the last few market debuts. <table style="border-width: initial; border-style: none;" class="redcator-table-advance"></colgroup><thead><tr><th style="border-width: 0.999997pt; border-style: solid; border-color: rgb(0, 0, 0); background-color: rgb(255, 255, 255); padding: 5pt; overflow: hidden; overflow-wrap: break-word;">Company </th><th style="border-width: 0.999997pt; border-style: solid; border-color: rgb(0, 0, 0); background-color: rgb(255, 255, 255); padding: 5pt; overflow: hidden; overflow-wrap: break-word;">Listing gains </th></tr><tr><th style="border-width: 0.999997pt; border-style: solid; border-color: rgb(0, 0, 0); background-color: rgb(255, 255, 255); padding: 5pt; overflow: hidden; overflow-wrap: break-word;">Cello World </th><th style="border-width: 0.999997pt; border-style: solid; border-color: rgb(0, 0, 0); background-color: rgb(255, 255, 255); padding: 5pt; overflow: hidden; overflow-wrap: break-word;">22% </th></tr><tr><th style="border-width: 0.999997pt; border-style: solid; border-color: rgb(0, 0, 0); background-color: rgb(255, 255, 255); padding: 5pt; overflow: hidden; overflow-wrap: break-word;">Blue Jet Healthcare </th><th style="border-width: 0.999997pt; border-style: solid; border-color: rgb(0, 0, 0); background-color: rgb(255, 255, 255); padding: 5pt; overflow: hidden; overflow-wrap: break-word;">14.4% </th></tr><tr><th style="border-width: 0.999997pt; border-style: solid; border-color: rgb(0, 0, 0); background-color: rgb(255, 255, 255); padding: 5pt; overflow: hidden; overflow-wrap: break-word;">IRM Energy </th><th style="border-width: 0.999997pt; border-style: solid; border-color: rgb(0, 0, 0); background-color: rgb(255, 255, 255); padding: 5pt; overflow: hidden; overflow-wrap: break-word;">-5% </th></tr></thead><tbody><tr><td style="border-left:solid #000000 0.9999974999999999pt;border-right:solid #000000 0.9999974999999999pt;border-bottom:solid #000000 0.9999974999999999pt;border-top:solid #000000 0.9999974999999999pt;vertical-align:top;background-color:#ffffff;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Plaza Wires </td><td style="border-left:solid #000000 0.9999974999999999pt;border-right:solid #000000 0.9999974999999999pt;border-bottom:solid #000000 0.9999974999999999pt;border-top:solid #000000 0.9999974999999999pt;vertical-align:top;background-color:#ffffff;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">48% </td></tr><tr><td style="border-left:solid #000000 0.9999974999999999pt;border-right:solid #000000 0.9999974999999999pt;border-bottom:solid #000000 0.9999974999999999pt;border-top:solid #000000 0.9999974999999999pt;vertical-align:top;background-color:#ffffff;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Updater Services </td><td style="border-left:solid #000000 0.9999974999999999pt;border-right:solid #000000 0.9999974999999999pt;border-bottom:solid #000000 0.9999974999999999pt;border-top:solid #000000 0.9999974999999999pt;vertical-align:top;background-color:#ffffff;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-5.3% </td></tr></tbody><tbody></tbody><tbody></tbody></table> Might face post-listing challenges say analysts A D2C company going public is a new IPO theme, but it’s also an acid test for such businesses in the public markets. Honasa is one of the first-movers in the sector, and grew at a breakneck speed of 80% compounded annual growth rate (CAGR) for the last two years. In the crowded online BPC market, it managed to gain a market share of 5.4%, as per Redseer. In addition to its flagship Mamaearth brand, it expanded its portfolio by incubating three brands and acquiring two more. It now has The Derma Co, Aqualogica, Ayuga, Dr Sheth’s and BBlunt (salons and products) – all catering to the new-age Indians who love tailor-made products. Its ad expenses stood at 34.99% of its revenue from operations as of June end. Experts say that it’s normal for a D2C company like itself. A large chunk of the net proceeds raised from the fresh issue will go towards ad expenses. It intends to spend more towards physical presence like more EBOs and BBlunt salons. “As the brand scales, the company is looking to connect consumers offline. A large part of the revenue decline is concentrated in its D2C website and app, where CAC (customer acquisition cost) is considerably high. As consumers shift to the offline mode, CAC needs will also reduce,” said a report by Emkay. What’s in it for the investors? The IPO is a combination of fresh issue and offer-for-sale (OFS). But the size of the fresh issue is much smaller than the OFS by promoters and other selling shareholders who will take a lion’s share of the intended fundraise of ₹1,701 crore. “New investors should be cautious as the IPO includes fresh share issuance of ₹365 crore and a low promoter stake of 37.41%. Conservative investors may wait and watch, while risk-takers can consider long-term investment for potential growth. However, the IPO appears to be overvalued in the current market conditions, and historical listings with high valuations have often faced post-listing challenges,” opines Prashanth Tapse, senior VP of research at Mehta Equities.

Mamaearth parent, Honasa Consumer gives 4% listing gains on debut day

<ul><li>As a D2C house of brands that’s going public, Honasa is a new IPO theme for investors.</li><li>HUL, Marico etc. are listed peers but it also has a lot in common with new-age companies like high advertisement expenses.</li><li>Honasa’s capex plans to go offline and customer acquisition cost can dent the profitability of the company, which has posted losses in FY23.</li><li>The company is catering to the premium BPC sector which in turn caters to the changing needs of the urban millennials and GenZs. </li></ul>If you are an investor who is tired of the same old consumer companies, there is a new theme in town. A direct-to-consumer or D2C company that houses several brands, Honasa Consumer, has taken the off-beat path of going public. “It can be a new IPO theme. There have been many D2C brands that were acquired by companies like Marico acquiring Plix, Beardo and Emani with The Man Company. This is the only one to go public,” says Preeyam Tolia, senior research analyst of FMCG &amp; Retail at Axis Securities. This ₹1,701 crore IPO, however, is also an acid test for direct to consumer (D2C) companies dreaming to go public. After the mixed reaction that many new-age digital companies like PayTM, Zomato and Nykaa received from the markets, most digital businesses are met with askance. Who are the peers? As a product creator, the company quotes HUL, Marico, Marico etc. as its peers. However, the company which produces its products via contract manufacturing, shares many traits with new-age companies. Honasa is one of the first-movers in the sector, and grew at a breakneck speed of 80% compounded annual growth rate (CAGR) for the last two years. In the crowded online BPC market, it managed to gain a market share of 5.4%, as per Redseer. It’s also in the most alluring businesses of the times. The BPC sector itself is expected to grow at a CAGR of 10% between 2022-27, the consulting firm says. It’s also establishing exclusive brand outlets (EBOs). But, it’s primarily a digital company that’s true to its nature. “We follow and listen to consumers and use the data to create new products. For example, our onion-based hair care products are based on the advice that most people receive as an antidote for hair fall. But people also pointed out that it’s tough to extract and use. That’s how we created it,” explained Varun Alagh, founder and CEO of Honasa Consumer at the company’s IPO press conference. In addition to its flagship, it has expanded its portfolio by incubating three brands and acquiring two more. It now has The Derma Co, Aqualogica, Ayuga, Dr Sheth’s and BBlunt (salons and products) – all catering to the new-age Indians who love tailor-made products. The ad-burn conundrum Honasa had to spend a lot of money to market the uniqueness of its varied products to the right consumers via online and offline channels. Its ad expenses stood at 34.99% of its revenue from operations as of June end. Experts say that it’s normal for a D2C company like itself. “D2C brands require a lot of advertising and promotional spends. They do need to invest in scaling up brands and they have been able to because of PE funds. But in a listed environment, it’s too early to comment on how they will fare,” comments Tolia. A large chunk of the net proceeds raised from the fresh issue will go towards ad expenses. It intends to spend more towards physical presence like more EBOs and BBlunt salons. That’s good for the brand in terms of customer acquisition cost, but in the long run. “As the brand scales, the company is looking to connect consumers offline. A large part of the revenue decline is concentrated in its D2C website and app, where CAC (customer acquisition cost) is considerably high. As consumers shift to the offline mode, CAC needs will also reduce,” said a report by Emkay. According to a Redseer report, most investors into new-age companies are confused about their business models. They’re unsure of which bucket a company falls into, especially when they go online to offline. They’re positioned online but grow offline. These are different models cost and growth-wise, it said enumerating investor concerns on startup listings. Moreso, the company had taken an impairment hit due to its subsidiary Momspresso in FY23, dragging it into losses to the tune of ₹150.9 crore. It had posted a profit of ₹14.4 crore in FY22. Its high expenses makes it tough to get back to the profit path, say analysts. “The company's focus on product development and innovation R&amp;D may impact short-term profitability due to high advertising expenses and capital expenditure,” says Prashanth Tapse, senior VP of research at Mehta Equities. What’s in it for the investors? The IPO is a combination of fresh issue and offer-for-sale (OFS). But the size of the fresh issue is much smaller than the OFS by promoters and other selling shareholders who will take a lion’s share of the intended fundraise of ₹1,701 crore. “New investors should be cautious as the IPO includes fresh share issuance of ₹365 crore and a low promoter stake of 37.41%. Conservative investors may wait and watch, while risk-takers can consider long-term investment for potential growth. However, the IPO appears to be overvalued in the current market conditions, and historical listings with high valuations have often faced post-listing challenges,” opines Tapse. Emkay too has broken its opinion on the company into three different scenarios — all based on how much of its past growth it can keep up with. If it’s able to double its turnover in three years, it’s an attractive investment. If it can keep up with its 20% revenue CAGR, it can be defined as ‘fair’, but if its revenue grows under 10%, then it’s an expensive investment. It all boils down to how far and clearly investors can gaze into the crystal ball.

Honasa Consumer’s D-Street debut an acid test for D2C companies

Struggling to wash your hair in less time span? Well, <keyword id="1028764" type="General" weightage="20" keywordseo="dry-shampoo" source="Orion">dry shampoo</keyword> is a solution to it. Dry shampoo is the most convenient option to make your hair look non-oily and greasy. It saves the time of washing hair and gives them a perfect go-to look in a few minutes. Unlike normal shampoo dry shampoo comes in a spray bottle and is easy to use without the consumption of water. It not only saves time and absorbs oil but also neutralizes the odor from the hair. Formulated with different ingredients, choosing the one that suits your hair type is important. To help you choose, we have shortlisted some of the best dry shampoos from Amazon. <bulletContentEmbed name="B00TB00I0C" columns="1"><bulletContentHeading name="B00TB00I0C_head"><div type="image" title="Recommended Choice" msid="89884555" hostid="261"></div></columnHeadThumb>B00TB00I0C</columnHeadTitle></columnHead></bulletContentHeading><bulleteContentBody name="B00TB00I0C_body"><bulletContentRow name="B00TB00I0C_0691572708952423"><bulletContentRowHeading><bulletContentRowHead col="1">BATISTE Divine Dark Wit Aspac Dry Shampoo, 200 ml</bulletContentRowHead></bulletContentRowHeading><bulletContentRowBody><bulletContentRowCell col="1">Enriched with the goodness of white peach, vanilla and mandarin, this dry shampoo from Batiste is a perfect option to instantly freshen up the hair. It is an easy alternative option to reduce oil and grease from the hair without washing the hair. This shampoo adds volume to the hair and gives a fuller look. Also, it adds texture to the hair and is suitable for all hair types.</bulletContentRowCell></bulletContentRowBody></bulletContentRow><bulletContentRow name="B00TB00I0C_0509563723016680"><bulletContentRowHeading><bulletContentRowHead col="1"></bulletContentRowHead></bulletContentRowHeading><bulletContentRowBody><bulletContentRowCell col="1">It removes excess oil from the hair.</bulletContentRowCell></bulletContentRowBody></bulletContentRow></bulleteContentBody></bulletContentEmbed> <bulletContentEmbed name="B00VVS9O6G" columns="1"><bulletContentHeading name="B00VVS9O6G_head"><div type="image" title="No Residue" msid="89884584" hostid="261"></div></columnHeadThumb>B00VVS9O6G</columnHeadTitle></columnHead></bulletContentHeading><bulleteContentBody name="B00VVS9O6G_body"><bulletContentRow name="B00VVS9O6G_6476082243279601"><bulletContentRowHeading><bulletContentRowHead col="1">Moroccanoil Dry Shampoo Dark Tone, 205ml</bulletContentRowHead></bulletContentRowHeading><bulletContentRowBody><bulletContentRowCell col="1">Suitable for all hair types, this dry shampoo from Moroccanoil gives your hair a soft and silky finish. With no dull residue, it instantly absorbs oil and maintains a natural look. It comes with a Moroccan oil fragrance that helps to prevent odor. Free from harmful chemicals and parabens, the shampoo is safe to use.</bulletContentRowCell></bulletContentRowBody></bulletContentRow><bulletContentRow name="B00VVS9O6G_0563993181959792"><bulletContentRowHeading><bulletContentRowHead col="1"></bulletContentRowHead></bulletContentRowHeading><bulletContentRowBody><bulletContentRowCell col="1">It provides nourishment to the hair.</bulletContentRowCell></bulletContentRowBody></bulletContentRow></bulleteContentBody></bulletContentEmbed> <bulletContentEmbed name="B00O2Y16A8" columns="1"><bulletContentHeading name="B00O2Y16A8_head"><div type="image" title="Manageable Hair" msid="89884614" hostid="261"></div></columnHeadThumb>B00O2Y16A8</columnHeadTitle></columnHead></bulletContentHeading><bulleteContentBody name="B00O2Y16A8_body"><bulletContentRow name="B00O2Y16A8_6586278026281037"><bulletContentRowHeading><bulletContentRowHead col="1">BBLUNT Back To Life Dry Shampoo, 125ml</bulletContentRowHead></bulletContentRowHeading><bulletContentRowBody><bulletContentRowCell col="1">With no usage of water, this dry shampoo from BBLUNT is an ideal choice if you are looking to volumize your hair with instant freshness. Unlike normal hair wash, it helps to save time and effort. Suitable for dry hair types, it leaves your hair soft and manageable.</bulletContentRowCell></bulletContentRowBody></bulletContentRow><bulletContentRow name="B00O2Y16A8_1289628488230306"><bulletContentRowHeading><bulletContentRowHead col="1"></bulletContentRowHead></bulletContentRowHeading><bulletContentRowBody><bulletContentRowCell col="1">It is easy to use and absorbs extra oil.</bulletContentRowCell></bulletContentRowBody></bulletContentRow></bulleteContentBody></bulletContentEmbed> <bulletContentEmbed name="B078B5LLBV" columns="1"><bulletContentHeading name="B078B5LLBV_head"><div type="image" title="Bouncy Look" msid="89884706" hostid="261"></div></columnHeadThumb>B078B5LLBV</columnHeadTitle></columnHead></bulletContentHeading><bulleteContentBody name="B078B5LLBV_body"><bulletContentRow name="B078B5LLBV_4037003102476674"><bulletContentRowHeading><bulletContentRowHead col="1">Dove Dry Shampoo, 141ml</bulletContentRowHead></bulletContentRowHeading><bulletContentRowBody><bulletContentRowCell col="1">Formulated with coconut and sweet lime fragrance, this dry shampoo from Dove refreshes the hair and gives a glossy look. The lightweight formula makes it convenient to use and provides nourishment to the hair. Also, it builds a bouncy look and makes the hair look voluminous.</bulletContentRowCell></bulletContentRowBody></bulletContentRow><bulletContentRow name="B078B5LLBV_0089960574123677"><bulletContentRowHeading><bulletContentRowHead col="1"></bulletContentRowHead></bulletContentRowHeading><bulletContentRowBody><bulletContentRowCell col="1">If you are willing to avoid hair wash in less time period, this shampoo is a perfect option to consider.</bulletContentRowCell></bulletContentRowBody></bulletContentRow></bulleteContentBody></bulletContentEmbed> <bulletContentEmbed name="B00GYB1B5M" columns="1"><bulletContentHeading name="B00GYB1B5M_head"><div type="image" title="Lightweight Formula" msid="89884740" hostid="261"></div></columnHeadThumb>B00GYB1B5M</columnHeadTitle></columnHead></bulletContentHeading><bulleteContentBody name="B00GYB1B5M_body"><bulletContentRow name="B00GYB1B5M_3230626473467258"><bulletContentRowHeading><bulletContentRowHead col="1">Tresemme Volumizing Dry Shampoo</bulletContentRowHead></bulletContentRowHeading><bulletContentRowBody><bulletContentRowCell col="1">Formulated with mineral clay and citrus, this dry shampoo from Tresemme is a perfect option if you are looking to give a volumizing look to your hair. The lightweight formula makes it convenient to use on the hair. Also, it leaves no visible residue and gives a fresh look.</bulletContentRowCell></bulletContentRowBody></bulletContentRow><bulletContentRow name="B00GYB1B5M_9867556195540519"><bulletContentRowHeading><bulletContentRowHead col="1"></bulletContentRowHead></bulletContentRowHeading><bulletContentRowBody><bulletContentRowCell col="1">It removes impurities and excess oil from the hair.</bulletContentRowCell></bulletContentRowBody></bulletContentRow></bulleteContentBody></bulletContentEmbed> <bulletContentEmbed name="B07HQMBFGB" columns="1"><bulletContentHeading name="B07HQMBFGB_head"><div type="image" title="Prevent Odor" msid="89885131" hostid="261"></div></columnHeadThumb>B07HQMBFGB</columnHeadTitle></columnHead></bulletContentHeading><bulleteContentBody name="B07HQMBFGB_body"><bulletContentRow name="B07HQMBFGB_1458718994395722"><bulletContentRowHeading><bulletContentRowHead col="1">Colab Dry Shampoo Fruity Fragrance, 200ml&lt;br&gt;</bulletContentRowHead></bulletContentRowHeading><bulletContentRowBody><bulletContentRowCell col="1">This pack of two dry shampoos from CoLab absorbs oil and removes greasiness to give a clean look to the hair. Without leaving any residue behind, it keeps your hair shiny and fresh. Suitable for all hair types, it has a sheer and invisible formula. Also, its fruity fragrance helps to prevent odor.</bulletContentRowCell></bulletContentRowBody></bulletContentRow><bulletContentRow name="B07HQMBFGB_5593860511185686"><bulletContentRowHeading><bulletContentRowHead col="1"></bulletContentRowHead></bulletContentRowHeading><bulletContentRowBody><bulletContentRowCell col="1">It keeps the hair clean for a longer time.</bulletContentRowCell></bulletContentRowBody></bulletContentRow></bulleteContentBody></bulletContentEmbed>

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<ul><li><keyword id="9332781" type="General" weightage="80" keywordseo="beco" source="Orion">Beco</keyword> claims to be one of the most affordable and sustainable home products companies in India. </li><li>India overall generates 25,940 tonnes of plastic waste every day, according to State of India’s Environment 2022 report. </li><li>The startup claims that it uses cornstarch, bamboo, sugarcane, coconut and other natural alternatives of single-use plastic.</li><li>D2C companies like Forest Essentials, Godrej Consumer, Colgate-Palmolive and Hindustan Unilever have also been coming up with <keyword id="49089" type="General" weightage="20" keywordseo="sustainability" source="Orion">sustainability</keyword> initiatives.</li></ul>Three friends Aditya, Anuj and Akshay, who graduated together from BITS Pilani, were regular participants in beach clean-ups in Mumbai. During one of their rounds, they found an orange wrapper of a chocolate bar Marathon, which was discontinued in the 1990s. Surprisingly, that plastic wrapper was well preserved and was still on the beach. That chocolate wrapper stuck in their minds and that’s how the sustainable home products company Beco was born in 2018. Beco captured the markets of Mumbai, Bangalore, Hyderabad and Chennai with its plant-based products like tearable <keyword id="15683675" type="General" weightage="20" keywordseo="laundry-sheets" source="Orion">laundry sheets</keyword> (that work like soap strips), floor cleaners, reusable kitchen towel rolls, bamboo-based facial tissues, bamboo tissue roll and compostable garbage bags. Fast forward to 2022, their company Beco is now one of the most affordable and sustainable home products companies, they claim. Their mantra is simple – make products more sustainable and affordable; make sustainability a household habit. “The problem that we're trying to solve is to help make sustainability convenient. As a businessman, I look at myself as a consumer. Just making smarter, leaner choices today is actually not burning a hole in your pocket,” said Aditya Ruia, co-founder of Beco, in a conversation with Business Insider India. Almost everyone in day-to-day lives uses products that are made out of plastic or are not good for the environment and these small products become a larger plastic waste nightmare. The country overall generates 25,940 tonnes of plastic waste every day, according to State of India’s Environment 2022 <a href="https://timesofindia.indiatimes.com/city/delhi/690-tonnes-added-daily-to-plastic-waste-mess/articleshow/90001711.cms">report </a>by Centre for Science and Environment. But since the pandemic, the awareness for sustainability and related products among people has risen as people have grown more environmentally conscious and are gradually shifting to sustainable products. “After the pandemic, I think home became the center of people's lives. Many ended up spending a lot of time at home. General awareness of what they were using at homes increased,” said Ruia. The startup claims it uses cornstarch, bamboo, sugarcane, coconut and other natural alternatives in place of single-use plastic. “Our <keyword id="15683677" type="General" weightage="20" keywordseo="bamboo-laundry-sheets" source="Orion">bamboo laundry sheets</keyword> (that work like soap strips) challenge the usage of <keyword id="15683676" type="General" weightage="20" keywordseo="plastic-detergent-bottles" source="Orion">plastic detergent bottles</keyword>. They use 70% water and only 30% formula, which is also chemical based,” Ruia added. And by using these alternatives and adopting sustainable production and manufacturing practices, the company has been able to <a href="https://yourstory.com/2022/10/becos-growth-journey-celeb-investors-sustainability-startup">save</a> over 500 tonnes of plastic waste.The maximum cost of the 53 different home products it makes is under ₹1800. “You are using those garbage bags when throwing your trash in your kitchen or in your common spaces. There is a compostable garbage bag available for that. Today, there are solutions for using eco-friendly bamboo toothbrushes, instead of a plastic one,” said Ruia. <cmsannotation type="cmsannotation" annotationid="Celebrity investors, expanding partnerships" comment="subhead" text="Celebrity investors, expanding partnerships">Celebrity investors, expanding partnerships</cmsannotation> Bollywood celebrities like Ranbir Kapoor, Aamir Khan, Dia Mirza and Bhumi Pednekar are already Beco’s investors. Beco was also one of the vendors for actress <keyword id="15683678" type="General" weightage="20" keywordseo="Dia-Mirzas-eco-friendly-wedding" source="Orion">Dia Mirza’s eco-friendly wedding</keyword> in 2021. It is also partnering with various big brands – We Work, BBlunt salon, Taj Hotel, Radisson – for increasing their sustainability practices. “So, when we are working with all of these partners, they have so much consumption in- house, whether it's in their salons, or in their co-working spaces, or in the hotels. We want to give an ESG (environmental, social, governance) push internally and promote sustainability,” Ruia said. D2C companies like Forest Essentials, Godrej Consumer, Colgate-Palmolive and Hindustan Unilever have also been coming up with similar sustainability initiatives. For instance, cosmetics and skincare company Forest Essentials has been using recyclable air-filled paper pouches or paper cushions for the products inside the cartons and for orders placed online via the company’s website, instead of plastic bubble wrap. Similarly, <a href="https://www.hul.co.in/news/2022/ways-were-helping-tackle-plastic-waste/">Hindustan Unilever</a> has initiated the usage of rHDPE, which is a plastic made from recycled High Density Polythene (25% recycled HDPE), in their personal care product bottles like TRESemmé, Sunsilk,Vaseline lotions, Surf excel laundry liquid and comfort fabric conditioner; and rPET (80% recycled PET) in blister packs for personal care brands such as Pepsodent toothbrushes and Vaseline lip care products. <cmsannotation type="cmsannotation" annotationid="Funds usage" comment="subhead" text="Funds usage">Funds usage</cmsannotation> Beco recently raised $3 million in a series A round that saw participation from Rukum Capital, Priyavrata Mafatlal, Better Capital, Prashant Pittie, Titan Capital and others. It plans to use these funds for research and development and product innovation, to build visibility and marketing, and for driving customer acquisition. “In terms of growth for the business, I think the funds are being deployed to grow. And we feel that to grow, we need to innovate on products. And we also need to spend on customer acquisition and help tell the customer, share that story. If they relate, they can make that switch,” Ruia added. Beco, like any other company, is also facing challenges in hiring the right talent and from rising costs in the digital marketing space. “Overall, I think it's a very common challenge. I don't think we are in the FMCG space. So, you know, obviously, building a retail presence becomes a tad bit more challenging, but I think we're getting there,” he added. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/oldest-and-youngest-companies-of-india-as-per-hurun-2022-report-check-out-the-list/articleshow/95926624.cms">234-year-old company EID Parry is only a tad more valuable than year-old unicorn GlobalBees</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/bahamas-taiwan-malta-among-10-countries-offering-digital-nomad-visa/articleshow/95941533.cms">Bahamas, Taiwan, Malta &amp; more: Here are 10 countries offering digital nomad visa</a>

This Mumbai startup is making tearable laundry sheets, bamboo-based facial tissues and more to replace plastic

<ul><li>Due to the pandemic, as brands tightened their purse strings in 2020, advertising agencies had to resort to salary cuts and/or worse, layoffs.</li><li>In the midst of it all, the two-year-old Django Digital, a part of the Schbang Network, hit its $1 million revenue mark despite the pandemic and economic slowdown.</li><li>Django Digital is currently serving a wide range of clients across different categories, including FMCG, lifestyle, health and skincare, amongst others.</li><li>It has associated with brands such as Society Tea, Imagine Meats, skinnsi, toothsi, Bblunt, Nykaa, Jio Fiber, BookMyShow, Storia Foods, among others.</li><li>We speak to <keyword id="2719410" type="General" weightage="20" keywordseo="aashay-shah" source="Orion">Aashay Shah</keyword> and <keyword id="12600371" type="General" weightage="20" keywordseo="shivang-shah" source="Orion">Shivang Shah</keyword>, <keyword id="12600372" type="General" weightage="20" keywordseo="founders-of-django-digital" source="Orion">Founders of Django Digital</keyword> on their journey so far, find out more about the factors that led to this quick growth during a global pandemic, and discuss their larger vision for the agency.</li></ul>The newest million dollar agency on the block is Django Digital. A part of <keyword id="12600376" type="General" weightage="20" keywordseo="schbang-network-company" source="Orion">Schbang Network Company</keyword>, this integrated digital solution provider was started by Shivang Shah and Aashay Shah out of their living room in August 2019 with a vision to grab a seat at the table with the bigger agencies in the industry. Shortly after its inception, the digital agency had to face its biggest challenge -- sail through a pandemic when the biggest advertising agencies of India were laying off their employees and cutting their salaries to half because brands had curtailed their marketing budgets. Django Digital not only survived the pandemic but also grew tenfold and has now hit the $1 million revenue mark. COVID-19 accelerated the adoption of digital marketing and pushed brands to reconsider their strategies and shift monnies where consumers are -- be it OTT or social media, screen time has increased and clients are following them. Digital marketing finally received its due recognition and credit last year, which worked well in Django Digital’s favour. We spoke to the founders, Shivang Shah and Aashay Shah, to find out their secret sauce, discuss the challenges that lie ahead and vision for the agency. Q. Can you walk us through your journey so far and share a few key milestones? The two of us have always been passionate about becoming entrepreneurs. So our dream venture Django Digital started off right in our living room as we both brainstormed nights on end. Within two months we started working out of a mezzanine floored office that used to be a repair shop. At this point, we were merely a team of five-to-six but creatively skilled individuals. Today, we are working out of a 2400 sq ft office in Lower Parel, Mumbai with a workforce of 60 people. We have a dedicated studio in the office for our photo and video-led content work. Our journey has been long and aspirational but let me tell you, we achieved so many of those aspirations. Since day one, we wanted to sign Society Tea as a client and exactly a year later, we got them onboard. As founders of a startup, both of us wore multiple hats and took up responsibilities of handling finance, accounts, recruitment, IT and administration. It was only after a year that we managed to hire an HR manager and an accountant. We learnt new skills, made quite a few mistakes but it was always a step in the right direction. Vivek Shah, our performance media lead, was working out of New York during the first year but still continued to work with Django, steadily managing around different time zones. Q. What does your clientele look like today? We remember when we started out, one of the conversations we had was we wanted to be known as 'two young kids around the block’, which did materialise. Within a year of Django being operational, we were sitting at the same table as all the other renowned agencies, managing a roster of 45+ clients. Over two years in, Django Digital is currently serving a wide range of clients across industries, including FMCG, lifestyle, health and skincare, amongst others. We’ve associated with both, young as well as well-established brands such as Society Tea, Imagine Meats, skinnsi, toothsi, Bblunt, Nykaa, Jio Fiber, BookMyShow, Storia Foods, and others. Catering to a multitude of clients across industries has expanded our portfolio, making us a 360-degree digital solutions provider. Q. Django started in 2019 and shortly in 2020, the business world had to face its biggest crisis ever of modern times. And you have not only survived through it but also grown tenfold! Tell us what kind of challenges you faced as a new business? In literal terms, Django Digital is a Covid baby. While others were adapting to the virtual ecosystem, we had to start from scratch in this environment. However, we managed to use this as an opportunity to meet rising demand for digital solutions. Certain challenges we faced across the way were creating and building virtual teams, coordinating and functioning in the entire work-from-home setup, pitching new ideas to clients and most importantly - providing our team members with necessary infrastructural essentials at their homes, especially the design team that is the backbone of our creative work. In spite of these challenges, we have successfully arrived at where we are today. This is just a learning for us that growth can happen in any environment, if you are dedicated and motivated enough. Q. You have hit the one million mark during a global pandemic. Just a few months ago, the advertising industry was struggling to survive. What has worked in your favour? Looking back, the two years of the pandemic have been the defining years for our agency. We quickly set in place a plan and we have stuck to it ever since - that of making difficult decisions early on and then accelerating out hard to take a rightful seat at the table with the bigger agencies in the industry. While mainline advertising was hit badly, we witnessed a surge in digital requirements. Traditional players rapidly adopted it without much knowledge, and as a desperate move to get business back on track. Many didn't see digital as a key channel earlier, but necessity drove them into it. They had to provide for their customers so as to retain them. But we started out purely as a digital agency with the experience to validate us and our work. Being part of this digital age and using it to our advantage is precisely what has worked best for us. Q. What do you think sets you apart? An industry that is booming with new agencies every day, what sets us apart is our approach towards business. We make it a point to associate with brands where we get to work directly with leadership teams so that our strategy and thoughts aren’t diluted in the process. The trifecta of social, influencers and performance media has enabled us to provide a holistic digital solution to all our clients. We’re a thriving agency with a young and dynamic workforce that is hungry for growth. We’re very specific about the talent we get aboard at Django. More than expertise, we value determination and that’s what sets us apart. As an organization, we believe in fostering a culture of creative freedom and minimal hierarchy. Q. You mentioned that you work with brands where the leadership team is equally involved. Can you tell me more about this approach? How different is this experience? How open are clients to being involved with their agency? We consciously make an effort to stay directly in touch with the founders of brands that we’re serving. The innovative ideas we have are not filtered in this route. Our expertise combined with our collective experience is the approach we have seen founders love and have in turn, grown to become more involved in the decision making process. By adapting this route, we get to deep dive into the brand and in return, brands get a better understanding of the digital marketing approach we suggest. We build a personal connection and a long-lasting relationship with brands that is beyond business. Q. Clients' needs are evolving rapidly. How are you keeping up with the pace? As a young digital agency, staying on our toes comes as second nature to us. We are constantly adapting to the latest trends. At times, we are the ones to notify the clients about the disrupting trends in the industry and how to leverage those. We cater to our clients’ needs and expectations, but we also put forth our informed opinion when the need arises. Our common objective is our clients’ growth and we do not shy away from stating our thoughts, even when they might contradict with the clients.’ Q. Which cities are you present in? Do you plan to expand further? At the moment, we are based out of Mumbai but we do handle clients pan India and in the USA as well as in Antwerp. We’re currently seeing the economy booming combined with changing demographic sentiments. We see a lot of potential within India for now, especially with the startup boom and therefore want to exploit that further. As years pass by, we will look at expanding outside India, however operations will always be from India itself. Q. You recently launched Djang-Gang, your influencer unit. What kind of response have you seen for the same? Djang Gang is a novel ‘by-invite’ club for content creators across genres, allowing them to showcase their talent and helping them build associations with suitable brands. We offer them an in-house studio set-up, post-production perks, commitment to handle all legal aspects and the youngest creative team to back the content being created. We’ve received an incredible response from over 300 creators who wanted to be a part of this initiative. However, we thoughtfully chose 14 talented and budding creators from the applications received. We’re progressing towards building a growing environment for the onboarded community of creators and are also on the lookout for dedicated creators wanting to make a mark in the industry. We would love to support and grow with them. Q. What are the challenges ahead and what kind of changes can we see at the agency in the next few months? We’re a 2.5-year-old agency that is growing at a rather fast rate for a pandemic baby, however, challenges are still an eminent part of what we do. The biggest challenge we are facing is scaling up at a sustainable pace. We’re learning how to drive our growth by building a resilient business model which balances sustainability with economic development and equitable growth. Apart from that, we face the challenges that every agency does - ensuring we work with the right clients, convincing them to execute out-of-box ideas with no past references and doing work that is worthy of the effort we put into it. While these challenges are constant, the most crucial one is hiring the right talent. At Django, we believe in hiring leadership talent that will shape the organization so finding the right people, especially virtually, and building our teams is a challenge we are working towards every day. Q. Finding good talent is something that people in our industry always complain about. Are you also facing a similar issue? The ongoing pandemic has made the process of finding great talent tougher but at the same time, allowed us to find innovative ways to get them onboard. As an agency that started out a little over 2 years ago with us two founders in our living rooms, we have scaled up and have grown our family to 60 young-blooded individuals. I can already tell you that you will see us grow to 100+ employees by August ‘22 and I’ll also explain how Django is doing this. We have got a very strong referral system within Django itself. I would say 50% of our hires are built through these referrals. Every employee here is helping the agency grow so they actively help spread the word and bring in like-minded people to us. Another fact is that hiring has been difficult across the industry, but what we realised early on is that this has opened several doors for us. As a Bombay-based agency, we aren’t limited to employees around us. The work-from-home virtual setup had us scouting great talent from across the country as well, leading us to grow to the strength we have today. Q. What is your larger vision for the agency? At Django Digital, we believe in awakening brands digitally - our larger vision is to inculcate this for a lot more brands. We don’t want to be the ‘agency of a brand’ but instead we want to be the storytellers of brands. We are on a strong mission to build Django Digital and its employees along with our clients. You can say that our larger vision is to do good work, inspiring work and work that impacts the world and businesses in a positive way. Q. What is your revenue goal for next fiscal? What do you think will be the main forces helping you reach there? Now that we have hit the $1 Million revenue mark, we are motivated to achieve a $1.5 M annual target. We’re expecting Django to progress at an even quicker rate now and our strategic imperatives will result in a stronger financial structure for us. We want to ensure a sustainable and profitable growth while increasing our revenue at higher gross margins over time. As a new-age digital startup agency, we bring the right edge to the table as well as a strong core team that will help us dominate the industry. We are focusing on segments that will allow profitable growth and at the same time staying engaged with our trusted existing clients that will help drive us towards our goal.

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