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Mamaearth Parent's IPO, Soaring at 70 Percent Subscription on Day 2

Honasa Consumer's IPO of Mamaearth, A Hot Investment Pick!

2 November 2023


Kunal Tyagi

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  • Mamaearth's parent company, Honasa Consumer Ltd, launched its IPO on October 31 with an issue size of ₹1,701 crore, comprising a fresh issue of ₹365 crore and an offer for sale of 4.12 crore shares.

  • The IPO received strong demand, with a 70% subscription rate within the first two days. Retail investors showed notable interest, subscribing at a rate of 62%, while high net-worth individuals (HNIs) subscribed to 9% of their allotted portion.

  • Employee participation was robust, at 3.19 times their allocated shares, and Qualified Institutional Buyers (QIBs) subscribed 1.02 times their shares, reflecting confidence in Honasa Consumer's future.

The highly anticipated initial public offering (IPO) of Honasa Consumer Ltd, the parent company of the beloved D2C brand Mamaearth, has been making headlines. The IPO opened for subscription on October 31 and is set to close today, on November 2. The issue size of Mamaearth IPO stands at a substantial ₹1,701 crore, composed of a fresh issue of shares worth ₹365 crore and an offer for sale of 4.12 crore shares by promoters and investors.

Strong Demand Evident

The Mamaearth IPO has witnessed significant interest from investors, with the subscription rate reaching 70% by the end of the second day. This indicates the strong demand for shares of Honasa Consumer. The retail investors' segment saw a subscription rate of 62%, demonstrating the appeal of Mamaearth to individual investors.

Non-institutional investors, often high net-worth individuals, have shown keen interest, subscribing to 9% of their allocated portion. Notably, they placed bids for 6.89 lakh shares out of the 78.72 lakh shares reserved for them. This level of interest from HNIs signifies confidence in Mamaearth and its parent company.

Employee Participation and Institutional Interest

Employees of Honasa Consumer have also demonstrated their trust in the company by subscribing 3.19 times their allocated shares on the second day of the pre-placement offer. This level of participation from employees is a testament to the company's work culture and their belief in its future prospects.

Qualified Institutional Buyers (QIB) have subscribed 1.02 times their allocated shares, with 1.61 crore shares bid out of the 1.57 crore shares allotted to them. The interest from institutional investors highlights the broader market's confidence in Honasa Consumer.

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Pricing and Investor Participation

The IPO's price band has been set between Rs 308 and Rs 324, providing a range for potential investors to consider. Mamaearth's parent company raised a significant amount of Rs 765.2 crore from 49 investors on October 30, at a price of Rs 324 per share with a face value of Rs 10. Notable investors, including Fidelity Funds, Abu Dhabi Investment Authority, Smallcap World Fund, Government Pension Fund Global, Carmignac Portfolio, and Goldman Sachs, participated in this pre-IPO placement offer.

Future Plans and Strategies

In an interview with YourStory, Co-founder Ghazal Alagh shared insights into the company's future plans. She mentioned that the company aims to replicate Mamaearth's successful playbook for its other brands. This decision is based on the strength and capability they have built over the years, aligning with their core business principles. As the IPO progresses, investors and the public eagerly await the next chapter in Mamaearth's journey.

The Mamaearth IPO has generated significant buzz and interest among investors, showcasing the faith in the brand and its parent company, Honasa Consumer Ltd. With a strong subscription rate and the support of various investor segments, the IPO is poised to be a milestone in the company's growth story. As it moves forward, Mamaearth's plans for its future brands will undoubtedly be a topic of interest and discussion in the coming days.

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