Mamaearth IPO opens for subscription today: Check key details
Honasa Consumer Limited, widely recognized as Mamaearth, opened its initial public offering (IPO) for bidding on Tuesday. The window will remain open until Thursday, i.e., November 2, 2023. The company seeks to raise Rs. 1,701 crore through this public offering. The IPO price is set at Rs. 308 to Rs. 324 per equity share, with plans to list the issue on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
Key details of Mamaearth IPO
Mamearth's Rs. 1,701 crore IPO consists of a fresh equity issue worth Rs. 365 crore and an offer for sale (OFS) aggregating up to Rs. 1,336 crore. Founders Varun Alagh and Ghazal Alagh, along with investors Kunal Bahl, Shilpa Shetty, and Rishabh Mariwala, will partially divest their stakes in the OFS. Investors can bid for at least 46 shares per lot and in multiples thereafter. The shares will be listed on the bourses on November 10.
Analysts' views on IPO
Emkay Global has assigned a "subscribe" rating to the Mamaearth IPO, evaluating the stock's valuation for three scenarios at the upper end of the price range. Sushil Finance also suggested subscribing to the IPO with a medium to long-term perspective. However, StoxBox advised an "avoid" rating due to the aggressive pricing at 97x annualized FY24 EPS (earnings per share). Prashanth Tapse from Mehta Equities recommended conservative investors adopt a wait-and-watch approach, while risk-takers may consider long-term investments for potential growth.
Company performance and growth potential
Apart from Mamaearth, Honasa Consumer manages five other brands: The Derma Co, BBlunt, Ayuga, Aqualogica, and Dr. Sheth's. The company witnessed a 58% increase in revenues to Rs. 1,493 crore in FY23 but recorded a loss of Rs. 151 crore compared to a profit of Rs. 14.4 crore the previous year. In Q1 FY24, revenue from operations surged 49% to Rs. 464 crore, and net profit reached Rs. 9.24 crore, compared to a Rs. 2.51 crore loss the previous year.
Utilization of IPO proceeds
The funds raised from the listing will be allocated for advertising expenses, capital expenditure for establishing new exclusive brand outlets (EBOs), investment in its subsidiary BBlunt for launching new salons, and for general corporate purposes and unspecified inorganic acquisitions. Kotak Mahindra Capital Company, Citigroup Global Markets India, JM Financial, and JP Morgan India are managing the issue.
