On Day 2, 70% of the issue was subscribed, where the retail investors’ portion was subscribed by 62%, the Non-Institutional Investor (NII) portion was subscribed by 9%, and the Qualified Institutional Buyers (QIB) portion was ordered 1.02 times. The employee share was subscribed 3.19 times.
On Day 1, the Honasa Consumer IPO saw 13% subscription, where the retail investors’ share was subscribed by 34%, the NII share was subscribed by 3%, and 10% of the QIB share was reserved. The employee share was subscribed 1.98 times.
The Mamaearth IPO has a price band of ₹308-324 per share of a nominal value of ₹10 each, and the lot size is 46 equity shares and in multiples of 46 equity shares thereafter.
Also Read: Mamaearth IPO: Seven mutual funds through 19 schemes invest ₹253 crore in anchor share
The company reserved not less than 75% of the shares in the public issue for QIB, not more than 15% for NII, and not more than 10% for retail investors. Discount from ₹30 per equity share is offered to eligible employees bidding in the employee reserve portion.
Mamaearth IPO subscription status on Day 3
At 10:18 IST, 72% of the offer was subscribed, with the retail investor portion subscribed at 67%, the NII portion subscribed at 15%, and the QIB portion reserved 1.02 times. The employee share was subscribed 3.44 times.
The IPO received bids for 2,08,88,830 shares against 2,88,99,514 shares offered, according to the BSE data.
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 crores. 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 sell their stakes in the OFS.
The company intends to use the net income to finance the following objectives: advertising costs to increase the exposure and awareness of the company’s brands; the amount of capital the company will need to build 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 unidentified inorganic acquisition.
The book-running lead managers of the Honasa Consumer IPO are Kotak Mahindra Capital Company Limited, Citigroup Global Markets India Private Limited, JM Financial Limited, and JP Morgan India Private Limited. The registrar of the offering is Kfin Technologies Limited.
Honasa Consumer IPO GMP today
The Mamaearth IPO GMP or gray market premium is +9, similar to the previous session. This indicates that Mamaearth’s share price was trading at a premium of ₹9 in the gray market on Thursday, according to investorgain.com.
Considering the upper end of the IPO price range and the current premium in the gray market, the estimated listing price of Mamaearth’s share price was indicated at ₹333 per which is 2.78% higher than the IPO price of ₹324.
Based on the gray market activities of the last 11 sessions, the current GMP ( ₹9) shows signals to the lower side. The lowest GMP is ₹0, while the highest GMP is ₹47, according to investorsgain.com analysts.
“Grey market premium” indicates the willingness of investors to pay more than the issue price.
Also Read: Mamaearth IPO closes with lukewarm response on day 1; topic subscribed 13%
Mamaearth IPO review
“At the upper price band of Rs.324, Honasa is available at Mcap/sales of 5.6x (FY24E annualized), which appears to be expensive. Given its strong top line growth, declining ad spend trend, expansion plans, value light business model and promising industry outlook, we assign a ‘Subscribe’ rating for the long term,” the broker said in its report.
Hem Securities
On a post-issue annualized Q1FY24 PAT basis, the brokerage estimates that the business brings the offer at a price range of ₹308-324 per share at ap/e multiple of over 90x. The company can create a consistent playbook and strengthen its brand. Additionally, the company’s customer-focused product innovation, digital-first omnichannel distribution, data-driven marketing and ability to generate growth and profitability in a manner that is capital efficient provide hope for the long-term growth forecast. Therefore, it has a “Long-Term Subscribe” rating on the topic.
Sushil Finance
“The revenue CAGR for the period FY21-23 stood at around 80.14%. The company operated on EBITDA margin of 1.52% and negative PAT margin of for year ended FY23 and EBITDA margin of 6.31% and PAT margin of 5.32% for quarter ended June 30, 2023. The company is asking PE- a multiple of 97.59. x annualizing diluted EPS for Q1FY24 ( ₹0.83). Looking at all factors, risks and opportunities, we are neutral on the company. The investors can watch the next few quarters for consistent profit and can ask for the issue with a medium-to-long-term view,” the brokerage said.