Recode Studios Ltd. IPO

Recode Studios

• Recode Studios is coming out with an initial public offering (IPO) of 28,22,400 shares in a price band of Rs 150-158 per equity share.
• The issue will open on May 05, 2026 and will close on May 07, 2026.
• The shares will be listed on SME Platform of BSE.
• The face value of the share is Rs 10 and is priced 15 times of its face value on the lower side and 15.80 times on the higher side.
• Book running lead manager to the issue is Seren Capital.
• Compliance Officer for the issue is Mukta Ahuja.

Profile of the company

Recode Studios is a beauty and personal care (BPC) company operating in the beauty, cosmetics and personal care segment in India. Its business primarily involves the branding, procurement and distribution of beauty and personal care products under the ‘Recode’ brand. It operates through an omnichannel distribution network, which comprises Company-Owned Company-Operated (COCO) retail stores, Franchisee-Owned Franchisee-Operated (FOFO) stores, third-party e-commerce platforms and its proprietary website and mobile application.

It offers a diversified portfolio of products across make-up, skincare, body care and beauty accessories, catering to a wide range of consumer preferences and usage occasions. The company offers around 350+ Stock Keeping Units (SKUs) across multiple categories and price points. Its product portfolio includes face make-up, eye make-up, lip makeup, face and body care products and beauty accessories.

Its omnichannel distribution model enables it to distribute its products through both offline and online channels, allowing customers to purchase its products through physical retail outlets as well as digital platforms. Offline distribution is carried out through a combination of COCO stores, which are directly operated by the Company and FOFO stores, which are operated by independent franchise partners. Online distribution is undertaken through its own website (shop.recodestudios.com) and mobile application (Recode Studios), as well as through third-party e-commerce marketplaces such as Amazon, Nykaa, Myntra and Flipkart.

Proceed is being used for:

• Funding of capital expenditure towards setup of a new warehouse at Ludhiana, Punjab
• Marketing and advertisement expenses towards enhancing the awareness and visibility of its brand
• Utilization towards working capital requirements
• General corporate purposes

Industry overview

The Indian cosmetics industry is among the fastest-growing consumer sectors, supported by strong domestic demand, rising disposable incomes, urbanization, and increasing beauty and wellness awareness. India ranks among the leading emerging markets globally, recognized for its herbal, natural, and ayurvedic formulations, which are gaining international acceptance. The country hosts more than 5,000 domestic companies along with global brands operating through subsidiaries, partnerships, and joint ventures. India’s beauty and personal care supply chain benefits from a robust manufacturing ecosystem, readily available raw materials, and a growing base of OEMs/ODMs catering to domestic and global brands. Manufacturers source key inputs such as oils, waxes, fragrances, surfactants, and botanical extracts from both local suppliers and international markets.

The breakdown of the Cosmetics market highlights clear consumer preferences and evolving demand patterns. Skincare (39%) dominates as the largest category, reflecting consumers’ increasing focus on self-care, wellness, and long-term skin health. Rising awareness of sun protection, anti-aging solutions, and the use of natural and dermatologically tested products has positioned skincare as the strongest growth driver. Hair care (21%) ranks second, supported by consistent daily use and innovation in herbal, organic, and specialized products like anti-dandruff and colour protection. Makeup (17%) retains its aspirational appeal, with growth coming from younger consumers, urban working populations, and the influence of social media and beauty influencers.

The Indian cosmetics industry, valued at $15.19 billion in 2024, continues to demonstrate strong momentum and resilience, driven by structural growth factors such as rising disposable incomes, rapid urbanization, changing lifestyle patterns, and heightened beauty and grooming awareness. With increasing participation of both domestic and global brands, the market is projected to expand at a CAGR of 6.21%, reaching around $27.75 billion by 2034. The ongoing digital revolution, widespread use of ecommerce platforms, and growing influence of social media have significantly altered consumer purchasing behaviour, leading to deeper penetration across urban, semi-urban, and rural markets.

Pros and strengths

Omnichannel presence integrating offline and online platforms: The company has an integrated omnichannel presence comprising COCO stores, FOFO stores, and digital sales channels including its proprietary website, mobile application and third-party e-commerce marketplaces such as Amazon, Flipkart, Myntra and Nykaa. This structure allows the company to distribute its products through multiple sales channels while maintaining uniformity in branding, product assortment and pricing. The company operates three COCO stores and twenty-one FOFO stores, and its products are also sold through its website, mobile application and multiple third-party e-commerce platforms. COCO stores are directly managed by the company, while FOFO stores are operated by franchise partners. The company’s omnichannel presence enables it to distribute its products through both physical retail outlets and digital sales channels as part of its overall distribution framework.

Diverse product range across beauty and personal care categories: The company offers a diverse product portfolio across beauty, cosmetics, skincare, body care and beauty accessories. The company offers approximately 350+ SKUs across multiple categories and price points. The Company’s product offerings include products used for regular personal care as well as products intended for use by make-up professionals. The portfolio includes face make-up products such as foundation, compact, concealer, primer, contour, blush, highlighter and setting or grip sprays; eye make-up products such as eyeliner, mascara, kajal, eyeshadow, eyebrow pencils and glitter pigments; and lip make-up products including lipsticks, lip gloss, lip crayons, lip oil and lip liners. The company also offers face and body care products, including face wash, cleanser, toner, serum, moisturizer, face gel, sunscreen, scrub, masks, body lotion, shower gel, hand cream and body oil, as well as beauty accessories such as brushes, sponges, applicators and cosmetic tools. 

Digital reach and online customer engagement: The company has developed an online presence through its website and social media platforms, which are used for customer interaction and engagement. The Company’s official Instagram handle had around 4,57,000 followers. The company’s website serves as an interface for customers accessing information relating to its beauty, cosmetics and personal care products. Customer interactions on the website are monitored using third-party analytics tools. The company’s website, social media platforms and third-party e-commerce marketplaces form part of its online interface with customers.

Risks and concerns

High dependence on Face Make-Up category: A significant portion of its revenue is derived from the Face Make-Up category, which includes products such as foundations, primers, concealers and related face cosmetics. Over recent periods, revenue from the Face Make-Up category has increased as a proportion of its overall revenue from operations, contributing 19.04% in FY 2022-23, 44.94% in FY 2023-24, 52.32% in FY 2024-25 and 69.97% during the period April 2025 to December 2025. As a result, its financial performance is materially dependent on sustained demand for products in this category, and any decline in demand for products in this category could adversely affect its business, financial condition and cash flows.

Rapidly changing consumer preferences: It operates in the beauty, cosmetics and personal care (BPC) segment in India, which is characterised by frequent changes in consumer preferences, evolving beauty and wellness trends, continuous product innovation and highly competitive intensity. Demand for products in this segment is influenced by several factors, including changing fashion and beauty trends, perceived product efficacy and safety, seasonal demand patterns, pricing dynamics, brand perception, social media influence and the introduction of new products by competitors. Consumer preferences in the BPC segment are difficult to predict and may change rapidly. If it fails to anticipate or respond in a timely and effective manner to such changes, or if its products do not gain consumer acceptance, demand for its products may decline. Any misjudgement in demand forecasting or product planning may result in excess or obsolete inventory, increased discounting or promotional expenses, pressure on margins, or write-offs, which could adversely affect its financial performance.

Absence of long-term agreements: The company does not have long-term agreements with its customers, and its revenues are significantly dependent on recurring orders from its B2B and online customers. Its sales are driven by recurring purchase orders from its B2B customers, franchise partners, as well as direct-to-consumer (D2C) sales through online marketplaces and its own website. It does not have long-term commitments or contractual arrangements that guarantee fixed volumes or assured revenue streams. Consequently, its ability to sustain and grow its business depends on the frequency, size and continuity of orders from these customers. There can be no assurance that such customers will continue to place orders with it at similar levels, on the same terms, or at all. Any reduction, modification, delay, or cancellation of orders by such customers may adversely impact its revenues and cash flows.

Outlook

Recode Studios is engaged in the business of beauty and cosmetics products. It offers a diversified portfolio of products across make-up, skincare, body care and beauty accessories, catering to a wide range of consumer preferences and usage occasions. The company offers around 350+ SKUs across multiple categories and price points. Its product portfolio includes face make-up, eye make-up, lip makeup, face and body care products and beauty accessories. On the concern side, its dependence on a limited number of third-party manufacturers, and adverse changes in commercial terms, regulatory compliance or operational continuity at such manufacturers, may adversely affect its business, financial condition and results of operations. Further, its reliance on online retail channels and third-party e-commerce platforms exposes it to risks relating to platform policies, pricing pressures, customer reviews and rapid amplification of adverse publicity, which could adversely affect its business, results of operations and financial condition.

The company is coming out with a maiden IPO of 28,22,400 equity shares of face value of Rs 10 each. The issue has been offered in a price band of Rs 150-158 per equity share. The aggregate size of the offer is around Rs 42.34 crore to Rs 44.59 crore based on lower and upper price band respectively. On performance front, the total income for FY2024-25 stood at Rs 4,793.88 lakh, compared to Rs 3,693.45 lakh in FY 2023-24, reflecting a growth of 29.79%. Profit After Tax (PAT) for the year ended March 31, 2025 stood at Rs 330.29 lakh, as compared to Rs 27.43 lakh for the year ended March 31, 2024.

Meanwhile, the company’s business strategy includes increasing its physical retail presence primarily through the addition of franchise operated retail outlets across various regions in India. The company operates a network of 19 franchise-operated retail stores across multiple states in India and also operates 3 company-managed retail stores. The company may consider expanding its franchise network in additional regions of India, including southern and eastern regions where its current retail presence is relatively limited, subject to the identification of suitable franchise partners, market assessment, and other commercial considerations. The company’s approach to franchise expansion is intended to leverage the local market knowledge of franchise partners while maintaining standardized branding and operating frameworks. The evaluation of potential franchise locations is undertaken based on factors such as local market conditions, consumer demand, accessibility and logistics considerations.