MAMAEARTH PARENT’S IPO SUBSCRIBED 13% ON DAY 1; RETAIL INVESTORS BUY 34% OF RESERVED SHARES

The parent business of well-known brands like Mamaearth, The Derma Co., and Aqualogica, Honasa Consumer, has started its initial public offering (IPO), according to current financial headlines. This article explores the specifics of the IPO and the participating companies, offering insight into the potential implications of this action for the market and the beauty and wellness sector.

Mamaearth parent’s IPO subscribed 13% on day 1; retail investors buy 34% of reserved shares Credits: Yourstory

IPO Subscription Numbers

The IPO of Honasa Consumer opened to investors with a lot of anticipation, and the first day of bidding brought some interesting subscription numbers. While the IPO offered a total of 2,88,99,514 shares, the bids on the opening day amounted to 36,12,518 shares, leading to a subscription rate of 13%. One notable aspect of the IPO was the enthusiasm of retail investors. They booked a substantial 34% of the shares reserved for them, which accounted for 52.4 lakh shares. This highlights the confidence that individual investors have in the company’s prospects.

High Net-Worth Investors (HNIs) Show Interest

The IPO also attracted high net-worth investors (HNIs), who put in bids for 2.31 lakh shares against their allocation of 78.72 lakh shares. This corresponds to nearly 3% of the reserved portion. Notably, HNIs with bid amounts ranging from Rs 2-10 lakh bid for 1.12 lakh shares out of 26.24 lakh shares assigned to them. Their participation showcases the interest of more significant investors in Honasa Consumer’s offering.

Qualified Institutional Buyers (QIBs) Join In

Honasa Consumer allocated a portion of its shares for qualified institutional buyers (QIBs), and this segment also showed interest in the IPO. QIBs subscribed to 10% of the shares allocated to them, with 15.43 lakh shares bid out of 1.57 crore shares reserved for them.

Price Band and Pre-IPO Placement Offer

The price band for Honasa Consumer’s IPO was set between Rs 308 and Rs 324. Additionally, the company initiated a pre-IPO placement offer, which was scheduled to close on November 2. The pre-IPO placement offered insights into investor interest and revealed the strong financial backing that Honasa Consumer was receiving.

Fundraising and Investors

The parent company of Mamaearth planned to generate Rs 365 crore by issuing new shares and putting roughly 4.12 crore shares up for sale (OFS). On October 30, they made a crucial move by raising Rs 765.2 crore from 49 investors at a price of Rs 324 per share, with a face value of Rs 10. Fidelity Funds, Abu Dhabi Investment Authority, Smallcap World Fund, Government Pension Fund Global, Carmignac Portfolio, and Goldman Sachs were notable investors in this round. The faith that institutional and international investors have in the company’s future potential is demonstrated by these investments.

Replicating Mamaearth’s Success

Ghazal Alagh, Co-founder of Honasa Consumer, previously stated the company’s intention to replicate Mamaearth’s successful business model with its other brands. This strategy highlights the company’s belief in its core principles and the potential for growth in various segments of the beauty and wellness industry. The IPO and subsequent investments will provide Honasa Consumer with the necessary capital to expand and execute this strategy.

Expanding the House of Brands Portfolio

The prospectus filed for the IPO mentioned that Honasa Consumer planned to use some of the IPO proceeds for strategic acquisitions to expand its portfolio of brands. By acquiring other brands, the company aims to diversify its offerings and gain a more significant foothold in the market.

Conclusion

Institutional and retail investors have shown a great deal of interest in Honasa Consumer’s first public offering. An optimistic prognosis for the business is indicated by the successful financing efforts as well as the ambitions to build on Mamaearth’s success and diversify its brand portfolio. The beauty and wellness sector will undoubtedly be significantly impacted as Honasa Consumer enters this next stage of expansion, and it will be interesting to see how this tale develops.


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