Honasa Consumer, which owns the Mamaearth brand of products, had a lukewarm debut on the exchanges. Shares of the company closed the session up just 4% on Tuesday. The company listed at an issue price of Rs 324 on the BSE and with a 1.85% listing premium at Rs 330 on the NSE, closing the day with a 4.06% and 4.10% gain on the two exchanges, respectively.
According to analysts, this did not come as a surprise, given that the market has been cautious on the firm given its financials. It closed the session with a market capitalisation of over Rs 10,800 crore.
Mamaearth’s shares touched the session’s high of Rs 340 on the BSE in intra-day trade, before closing at Rs 337.15.
The initial public offering (IPO) of Honasa Consumer was subscribed 7.61 times on the last day of subscription on November 2.
The Rs 1,701.44-crore IPO had a price range of Rs 308-324 a share. The Gurugram-based beauty and personal care company was founded in 2016 by husband-wife duo Varun and Ghazal Alagh.
It began with the launch of Mamaearth and over the years added five more brands to its portfolio, including The Derma Co, Aqualogica, Ayuga, BBlunt, and Dr Sheth’s, and built a ‘House of Brands’ architecture.
On the financials front, Honasa Consumer recorded a revenue growth at a CAGR of 80.14% during FY21-FY23, to Rs 1,492.75 crore in FY23, but has seen volatility on the profitability front, though performance at Ebitda level remained strong. It had a net loss of Rs 142.8 crore during the year ended March FY23, impacted by the impairment loss on goodwill and other intangible assets (Rs 154.7 crore), against a profit of Rs 15.7 crore in the previous year.