Mamaearth has tepid debut in a year of many strong listings

Mumbai: Despite strong investor demand during its IPO, Honasa Consumer Ltd, the parent company of personal-care brand Mamaearth, made a lacklustre debut on BSE on Tuesday. Shares opened at ₹330, a modest premium of 1.85% to the issue price of ₹324, and closed at ₹337.10, just 4% more than the issue price. This underwhelming performance reflects the mixed fortunes of IPOs in India since last Diwali.

Companies such as Ideaforge Tech, Netweb Technology, Utkarsh Small Finance Bank, Cyient DLM, SBFC Finance, Cello World, and Mankind Pharma, recorded strong listing gains ranging from 20% to 93%. The broader market, as represented by the Nifty 50 index, has also shown resilience, rising by 10.44% since last Diwali. However, not all IPOs have been so fortunate. Yatra Online’s shares fell by 10.2% when they were listed, while Inox Green’s stock shed 7% on debut and Fusion Microfinance’s stock declined 2.3%.

The biggest first-day listing gain was by Ideaforge Technology, which listed at ₹1,300 on 7 July, a premium of 93.5% over the issue price of ₹672. Netweb Technologies also had a strong listing, opening at ₹947 on 27 July, a premium of 89% over the issue price of ₹500. Utkarsh Small Finance Bank, which had issued shares at ₹25, opened at ₹40, clocking a remarkable premium of 60%. Cyient DLM also made a strong debut on the stock exchanges. The company’s shares opened at ₹403, a premium of 52.1% over the issue price of ₹265, and SBFC Finance shares opened at ₹82, a premium of 43.9% over the issue price of ₹57.

In the IPO, Honasa Consumer Ltd garnered ₹1,701.44 crore, with ₹365 crore raised from the issuance of new shares and ₹1,336.4 crore from its founders and investors. The majority of Honasa Consumer Ltd’s shares are held by the public, with promoters Varun Alagh and Ghazal Alagh holding a combined stake of 37.34%. The remaining 62.59% of the company’s shares are held by a variety of investors, including institutional investors, retail investors, and employees. Fireside Ventures Fund holds the largest stake among institutional investors with 10.33%, followed by Sofina and Stellaris with 9.44% and 9.45% stakes respectively.

In the OFS, several investors sold a portion of their shares. Fireside Ventures sold 7,972,000 shares, Sofina sold 9,566,000, and Stellaris sold 10.9 million. Individual investors like Kunal Bahl, Rishabh Mariwala, Rohit Kumar Bansal, and Shilpa Shetty Kundra sold 1,193,000 shares, 5,700,000 shares, 1,193,000 shares, and 1,393,000 shares.

Based on the issue price of ₹324 per share, Fireside Ventures, which invested ₹ 5.84 crore, saw the investment grow to ₹258 crore, representing a remarkable Return on Investment (ROI) of 44.2 times. Similarly, Stellaris Venture Partners, with an initial investment of ₹7.82 crore, realized ₹354.54 crore from the IPO, achieving an ROI of 41.43 times. Shilpa Shetty Kundra’s investment of ₹5.8 crore yielded ₹45.13 crore, representing an Return on Investment (ROI) of 45.1 times. Rishabh Harsh Mariwala, saw his ₹ 3.4 crore investment grow to ₹ 184 crore, translating to an impressive ROI of 53.5 times.

Honasa Consumer’s IPO opened for subscription on 31 October and closed on 2 November.

Considering the upper end of the IPO price band and the current premium in the grey market, the listing price of Mamaearth share price was estimated at ₹355 apiece, or 9.57% higher than the IPO price of ₹324.