Mamaearth IPO Sees Flat Response, Debuts With 2% Premium At Rs 330

Mamaearth parent Honasa Consumer lists 2% higher than issue price at Rs 330

Mamaearth IPO listing: Honasa Consumer’s stock was listed at Rs 330 on the NSE, marking a 2 premium over its issue price of Rs 324 per share. On the BSE, it began trading at Rs 324, essentially at par.

Honasa Consumer Ltd, the parent company of Mamaearth, made its debut on Dalal Street with a relatively flat opening on Tuesday.

The company’s stock was listed at Rs 330 on the NSE, marking a nearly 2 premium over its issue price of Rs 324 per share. On the BSE, it began trading at Rs 324, essentially at par.

Mamaearth IPO details

The Mamaearth IPO consists of an offer for sale (OFS) of around 4.12 crore shares and a fresh issue of shares worth ₹365 crore. The IPO will see the sale of 3,186,300 shares by Honasa promoter Varun Alagh and up to 100,000 shares by his wife Ghazal Alagh. A number of other shareholders, including Kunal Bahl, Shilpa Shetty Kundra, Rishabh Harsh Mariwala, Fireside Ventures Fund, Sofina, Stellaris, and Rohit Kumar Bansal, will be selling their stakes in the OFS.

The company intends to use the net proceeds to finance the following goals: advertising costs to raise the company’s brands’ exposure and awareness; the amount of capital that the company will need to build up new EBOs; financial support for the establishment of new salons by the company’s subsidiary, Bhabani Blunt Hairdressing Private Limited (BBlunt); general corporate objectives; and an unidentified inorganic acquisition.

The listing performance of Honasa Consumer fell short of expectations, despite being oversubscribed on the last day.

Leading up to its listing, the company was trading at a premium of Rs 25 per share on the unofficial grey market, suggesting an 8 per cent listing gain. However, the premium in the grey market remained in the single digits when the IPO opened for bidding.

During its IPO, Honasa Consumer offered shares in the price range of Rs 304 to Rs 328, with a lot size of 46 equity shares.

The IPO aimed to raise a total of Rs 1,701.44 crore, comprising a fresh share sale of Rs 365 crore and an offer for sale of 5.25 crore equity shares. The IPO subscription period ran from October 31 to November 2.

The IPO garnered an overall subscription rate of 7.61 times, with strong participation from qualified institutional bidders (QIBs) leading the way at 11.50 times oversubscription.

Non-institutional investors subscribed 4.02 times, while retail investors and employees subscribed 1.35 times and 4.88 times, respectively, during the three-day bidding process.

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Established in 2016, Honasa Consumer is a provider of beauty and personal care products, serving more than 500 cities across India. The company has developed various consumer brands in-house, including Mamaearth, The Derma Co., Aqualogica, Dr. Sheth’s, and Ayuga. Honasa’s product range covers baby care, face care, body care, hair care, color cosmetics, and fragrances.

In addition to its consumer brands, Honasa operates a professional salon chain called ‘BBlunt Salons’ to complement its product portfolio.

The IPO was managed by leading book-running managers, including Kotak Mahindra Capital, JM Financial, Citigroup Global Markets, and JP Morgan, with Kfin Technologies serving as the registrar for the Mamaearth IPO.

Honasa Consumer IPO GMP today

The Mamaearth IPO GMP today or grey market premium is +24. This indicates the Mamaearth share price was trading at a premium of ₹24 in the grey market on Tuesday, according to investorgain.com.

Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Mamaearth share price was indicated at ₹348 apiece, which is 7.41% higher than the IPO price of ₹324.

Based on last 16 sessions’ grey market activities, the current GMP ( ₹24) indicated strong listing. The lowest GMP is ₹0, while the highest GMP is ₹47, as per analysts of investorgain.com.

‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.

Also Read: Mamaearth IPO: What does the latest GMP signal ahead of listing; check key details

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