Onest Ltd IPO

Last Updated on October 4, 2023 by BFSLTeam BFSLTeam

The Mumbai-based FMCG company Onest Ltd has drafted its initial papers with the market regulator SEBI to launch its IPO. Its IPO will consist of both a fresh issue and an Offer for Sale (OFS). There will be fresh issues worth Rs. 77 crore and OFS of up to 3.25 million shares by promoters and existing shareholders. 

Onest Ltd’s primary focus lies within the realms of Fast-Moving Consumer Goods (FMCG) and Non-Fast-Moving Consumer Goods sectors. The company adopts an asset-light approach to its operations, relying predominantly on contract manufacturing for its products.

The company aims to utilise the proceeds from its IPO to finance working capital requirements and other corporate purposes. Learn more about Onest IPO and the company details. 

About Company 

Onest Ltd operates in both FMCG and Non-FMCG markets and caters to B2B2C and B2B clients. Since its incorporation, it quickly earned “One Star Export House” and “Two Star Export House” statuses from the Government of India. As of March 31, 2023, the company exports to 57+ countries and entered the domestic market through Onest EasyLife LLP.

Onest has set up a subsidiary called Endiro Limited to focus on premium products from the financial year 2023-24. Its global presence spans five continents, including Africa, the Middle East, Latin America, SAARC, ASEAN and CIS countries. The company’s revenue grew at a CAGR of 69.55% from Rs. 641.13 million in FY2021 to Rs. 1,843.06 million in FY2023. Currently, the company is active in private labelling with plans to expand into the US and European markets.

Coming to the IPO, it consists of a fresh issue of shares worth Rs. 770 million and an OFS of 3,250,000 shares. Of this, 2.66 million shares are offered by the promoter Pawan Kumar Gupta. Glentrade DMCC is a selling shareholder putting up 4.69 lakh shares. 

Other selling shareholders include Ramesh Girdharilal Lulla offering 62,250 shares, Rahul Porwal offering 30,000 shares, Piyush Dungarpuria offering 7,500 shares, Pankaj Jain offering 15,000 shares and R Sambhu Kumar offering 1,875 equity shares.

Also Read: How does an IPO work?

Company Financials 

The table below lays down some crucial financial details as per Onest Limited DRHP which are essential for potential investors to know: 

Parameters as Per the Year Ending On	31 March 2023	31 March 2022	31 March 2021
Total Assets	737.33	343.48	263.74
Total Liabilities	440.35	156.58	201.53
Total Expenses	1,755.44	1,055.70	633.62
Total Revenue	1,865.25	1,089.89	654.26
Profit After Tax	79.95	24.44	14.58
EBITDA	106.57	36.61	19.21
Earnings Per Share (EPS) (Basic and Diluted) *	3.20	1.06	1.84

*Values except EPS are in INR millions 

Strengths 

The following are some of the key strengths of Onest Ltd: 

• One of the biggest advantages the company has over its competitors is a competitive and fair market price strategy. In today’s rapidly developing market, it is essential that you maintain an edge over your competitors. The company has also placed great emphasis on quality control. 
• Onest Ltd has focused on the diversification of its product portfolio. There are more than 20 products under its FMCG vertical and other industrial and miscellaneous products under the non-FMCG vertical. 
• Onest has managed to maintain consistency in the growth of its profitability. The company has reported a CAGR of 69.55% in its revenue from operations for the period between FY21 and FY23. 
• The company has managed to expand its business internationally and it has exported to more than 57 countries as of March 2023. Some of these are the UK, the USA, Africa, UAE, CIS countries and several countries in Latin America. 

Risks Involved 

Along with a company’s strengths and strategies, there are always some underlying risks that have the potential to harm the company’s performance on multiple fronts. Here are some of the risks involved with Onest Ltd: 

• As can be understood from the term “Fast Moving Consumer Goods” or FMCG, the industry is continuously and rapidly evolving. Hence, it is essential to identify and work towards matching the changing patterns and trends of consumers. Otherwise, the company can face adverse impacts. 
• Onest has to maintain the brand name and reputation which are vital to its success. Hence, it has to consistently focus on manufacturing and distributing its products efficiently to ensure it stays ahead of its competitors.

Also Read: Risk of investing in IPO

Summary 

Onest Ltd aims to utilise the proceeds from its fresh issues worth Rs. 20 crore to fund its working capital needs and for other corporate purposes. It has reserved a maximum of 75% of the shares for QIB, up to 15% for non-institutional investors, and 10% for retail investors. The shares will be listed on NSE and BSE. 

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