Mamaearth-Parent Honasa Consumer Makes Muted Debut; Shares Climb 4% Premium To IPO Price

Mamaearth IPO: On Tuesday, Honasa stocks began trading at Rs 330, up 1.85 per cent on the NSE, however, it later touched a new high of Rs 337.60 and a low of Rs 323

Honasa Consumer Ltd's shares made a muted debut on the exchanges on Tuesday despite oversubscription. Honasa Consumer, which which owns FMCG brands such as Mamaearth and The Derma Co, ended with 4 per cent gains in debut trade against the issue price of Rs 324. Shares of the firm finally ended at Rs 337.10, a gain of 4 per cent. 

On Tuesday, Honasa stocks began trading at Rs 330, up 1.85 per cent on the NSE, however, it later touched a new high of Rs 337.60 and a low of Rs 323. The stock listed at par with the issue price of Rs 324 on the BSE. The company commanded a market valuation of Rs 10,718.99 crore during the morning trade.

Mamaearth’s IPO had seen oversubscription, as qualified institutional bidders (QIB) bought 11.5 times. Retail investors, however, remained cautious, subscribing 1.4 times the allotted quota.

The Initial Public Offer (IPO) of Honasa Consumer was subscribed 7.61 times on the last day of subscription on Thursday. The Rs 1,701.44 crore IPO had a price range of Rs 308-324 a share. The Gurugram-based beauty and personal care company was founded in 2016 by husband-wife duo Varun and Ghazal Alagh.

Honasa's Mamaearth brand was rolled out in 2016. It has emerged as one of the fastest-growing BPC brands in the country reaching an annual revenue of Rs 1,000 crore within six years. 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. 

Honasa Consumer logged a net loss of Rs 150.9 crore during the year ended March 2023, impacted by the impairment loss on goodwill and other intangible assets, against a profit of Rs 14.4 crore in the previous year. The company's volume growth fell significantly to 68.23 per cent in FY23 from 143.3 per cent in FY22 and 298.42 per cent in FY21. However, revenue from operations grew at a CAGR of 80.14 per cent during FY21-FY23.