WomenCart IPO Review: WomenCart is coming up with its Initial public offering. This is an SME (small and medium-sized enterprise) which is going to be listed on NSE SME. The IPO will be open for subscription on 16th October 2023 and closes on 18th October 2023.
This article will provide a comprehensive WomenCart IPO Review, including an in-depth analysis of the company’s financials and the strengths and weaknesses of WomenCart. Keep reading for more details!
Table of Contents
WomenCart IPO Review – About The Company
Established in 2018, Womencart is a digital consumer-centric retail platform that offers a wide range of classic and emerging beauty and wellness products. The platform caters to both men and women, providing skincare, body care, hair care, and fragrances from the comfort of home.
Womencart’s product portfolio boasts approximately 10,000 SKUs from its own brand as well as various national and international brands. The company owns several brands including Sayda Jewels, which offers a blend of old and new fashion trends; Wondercurve, an online lingerie and intimate apparel brand for women; Faeezah, a clothing brand; and Feya, a hair accessories brand.
REVENUE-The company generates 15.49% of its revenue from its owned brands and 84.51% from other brands. The products of the owned brands are procured from specific third-party manufacturers.
PRESENCE-Womencart operates through its own online website which offers a wide range of products from various brands like Lakme, Maybelline, Yardley, Sugar, Ponds, Olay, Wondercurve, Enamor, Zivame, etc. The online sales contribute to 81.8% of the company’s revenue. Womencart is also a registered online seller on Amazon and Meesho.
In addition to its online presence, it has an offline presence with two stores and one kiosk in Delhi. These brick-and-mortar stores allow customers to visit, make purchases, and interact with the brand. The offline segment generates 18.1% of the company’s revenue.
WomenCart IPO – Industry Overview
India’s e-commerce sector is a fast-growing and diverse market, driven by smartphones, 4G, and income growth. It is expected to increase from US$ 38.5 billion in 2017 to US$ 200 billion by 2026. India has 150 million online shoppers in FY21, which may reach 350 million by FY26.
Some key developments in the sector are, Walmart is set to invest over US$ 2.5 billion in India’s e-commerce and payments sectors. In 2021, India’s e-commerce sector received a record US$ 15 billion in PE/VC investments, a 5.4 times increase from the previous year.
The Indian government has raised the FDI limit in the e-commerce marketplace model to 100% for B2B models to attract more foreign players. The Direct-to-Consumer (D2C) market in India is projected to reach US$ 60 billion by FY27, and the overall e-commerce market is expected to hit US$ 350 billion by 2030, with a growth of 21.5% anticipated in 2022 to reach US$ 74.8 billion.
The Indian beauty and personal care market was worth US$ 26.3 billion in 2022 and may reach US$ 38.0 billion by 2028, growing at a CAGR of 6.45%. Beauty products are popular across all categories.
The market is driven by demand for natural, organic, and non-toxic cosmetics, anti-pollution skincare and hair care products, and smart beauty devices and personalized skincare solutions.
The market is also supported by a wide range of products, rising affluence and spending power, and growing e-commerce platforms that offer convenience and variety to consumers.
WomenCart IPO – Financial Highlights
WomenCart Limited has showcased a strong financial performance. The company’s operational revenue has witnessed a significant surge, escalating from ₹ 1.3 crore in March 2021 to ₹8.7 crore in March 2023.
Simultaneously, the Profit After Tax (PAT) has seen a positive shift, moving from -17.94 lakhs in March 2021 to ₹47 lakh in March 2023. The company’s net worth has been on a steady rise, increasing from ₹16.3 Lakh in 2021 to ₹3.1 crore in 2023.
On the liabilities front, the company’s borrowings have seen an uptick, rising from ₹92.2 lakh in March 2021 to ₹1.2 Crore in March 2023.
In terms of financial ratios, the company boasts a Return on Equity (ROE) of 15.11% and a Return on Capital Employed (ROCE) of 17.97%.
Financial Metrics
(Source: RHP of the company)
Competitors of WomenCart
Womencart faces competition with some of the Key Competitors in the Industry such as Nykaa, Purplle, SS Beauty etc.
Strengths of the company
- WomenCart has a diversified portfolio with a wide range of products from its own brand and various national and international brands, with over 10,000 SKUs available on its website and other e-commerce platforms.
- The company has a strong online and offline presence, with over 1.8 million page views on its websites, enhancing engagement and sales.
- Womencart has established robust relationships with beauty brands, securing new product launches and exclusive deals, thereby strengthening its market position.
- The company prioritizes customer service and satisfaction, offering personalized recommendations, virtual try-on experiences, swift delivery services, and exclusive benefits for subscribers or privileged members.
Weaknesses of the company
- The beauty and personal care market is highly fragmented, and competition is intense. The company’s market share may decline if competitors invest more in growing online sales in the retail e-commerce market.
- A key weakness of Womencart lies in its reliance on specific third-party manufacturers for its own brand products, without any long-term procurement contracts. This necessitates the constant need to identify additional manufacturers and dealers to cater to customer demands.
- Womencart has obtained unsecured loans and requires substantial working capital. The inability to secure additional financing for future working capital requirements could lead to business losses.
- A significant weakness of the company lies in its high product return rates. The associated costs, including return shipping fees, escalate the operating costs and adversely affect the business. Furthermore, returned purchases do not contribute to revenue, exacerbating the financial impact.
WomenCart IPO – GMP
The IPO for Womencart is set at a price of ₹86. The latest grey market price as of October 12th, 2023 stands at ₹96. This gives it a premium of 11.63% or Rs 10 per share.
WomenCart IPO Review – Key IPO Information
| PARTICULARS | DETAILS |
|---|---|
| IPO Size | ₹9.56Cr |
| Fresh Issue | ₹9.56Cr |
| opening date | 16th october 2023 |
| closing date | 18th october 2023 |
| face value | ₹10 per share |
| price band | ₹86 per share |
| lot size | 1600 shares |
| Minimum lot | 1 (1600 shares) |
| maximum lot | 1 (1600 shares) |
| Investment amount | ₹1,37,600 |
| listing date | 27th october 2023 |
Promoters: Mrs. Veena Pahwa is the promoter of the company
Book Running Lead Manager: Narnolia Financials Services Limited
Registrar to the Offer: Maashitla Securities Private Limited
The Objective of the Issue:
- To meet the expenses of Branding and Marketing.
- To meet the expenses of App Development.
- To meet the Working Capital requirements.
- To meet the General Corporate Purposes.
- To meet the Issue Expenses.
In Closing
WomenCart, despite facing stiff competition in the industry, is strategically poised for growth. The company is leveraging its data and market position to expand both domestically and internationally. With plans to open two stores outside India, WomenCart is not only growing its core business but also venturing into new markets and adjacent categories. This multi-pronged approach underscores the company’s commitment to reaching new markets and regions.
However, it is important to note that this is an SME IPO where the minimum investment amount is 1,37,600 which is higher than a mainline IPO.
What do think the future holds for the company? Are you applying for the IPO? Let us know in the comments below.
Written By Niharika Jadhav
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