Mamaearth IPO Shows Lackluster Debut; Lists with a 2% Premium

By: WE Staff | Tuesday, 7 November 2023

Mamaearth's parent company, Honasa Consumer Limited launched its Initial Public Offering (IPO) today at 10 a.m. under the 'B' Group of Securities on Indian exchanges.

Honasa Consumer had a lackluster start on the exchanges despite oversubscription. Mamaearth's parent company's shares began trading at Rs 330 on the NSE and Rs 324 on the BSE, compared to the issue price of Rs 324. Mamaearth's IPO successfully passed, with qualified institutional bidders buying 11.5 times and retail investors subscribing 1.4 times the allotted quota.

In the fiscal year ended March 2023, the company reported a net loss of Rs 150.9 crore, due to impairment losses on goodwill and intangible assets, compared to a profit of Rs 14.4 crore in the previous year.

The volume growth slowed down significantly to 68.23 per cent in FY23 from 142.3 per cent in FY22 and 298.42 per cent in FY21, despite a CAGR of 80.14 per cent in operations revenue during the same fiscal year.

However, major investors have shown interest including, Smallcap World Fund Inc, Fidelity Funds, Abu Dhabi Investment Authority, Government Pension Fund Global, Caisse De Depot ET Placement, FSSA India Subcontinent Fund, Carmignac Portfolio, Goldman Sachs, and Hornbill Orchid India Fund in Mamaearth's parent company, Honasa Consumer.

Retail investors showed weaker interest in the IPO, primarily due to the company's exorbitant advertisement spending, which accounts for 30 to 40 per cent of its revenue.

Honasa Consumer

Honasa Consumer Limited is a digital-first brand house to create India's most-loved consumer brands in Beauty & Personal Care. It was established in 2016 and is based in South West Delhi, Delhi. Honasa Consumer Limited is the parent company of Mamaearth, a popular brand that offers a variety of natural personal care products. Internally, the company has grown several consumer brands such as The Derma Co., Aqualogica, Dr. Sheth's, and Ayuga. It recently acquired stakes in BBLUNT and the Momspresso content platform. Honasa Consumer Limited intends to raise funds through an initial public offering (IPO).

Honasa Consumer claims to be India's largest digital-first beauty and personal care company in terms of revenue from operations for fiscal FY23. Mamaearth brand, launched in 2016, has become the fastest-growing BPC brand in the country, generating an annual revenue of Rs 1,000 crore in six years.