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Mamaearth IPO sees lukewarm response, employee portion oversubscribed

Mamaearth IPO sees lukewarm response, employee portion oversubscribed
© Reuters.

Mamaearth’s initial public offering (IPO) has been met with a tepid response from investors, according to data from the Bombay Stock Exchange (BSE). The IPO, which launched on Tuesday, saw a disappointing subscription rate of just 0.13X out of the total 2.88 Cr shares on offer. Of these, bids were placed for only 36.25 Lakh shares.

The employee portion of the offering was a bright spot, with an oversubscription rate of 1.98X. Employees bid for 67,344 shares, against the 34,013 shares available. Retail investors showed moderate interest in the retail quota, subscribing at a rate of 0.34X by bidding for 17.82 Lakh out of the 52.24 Lakh shares on offer.

Qualified institutional buyers (QIBs) showed limited interest in the IPO, bidding for a mere 15.43 Lakhs out of the 1.55 Cr shares available. Non-institutional investors also displayed minimal interest with a subscription rate of just 0.03X.

The IPO was launched by founders Ghazal and Varun Alagh with a price band set between INR 308 and INR 324 as the company targets a $1.2 Bn valuation. Honasa Consumer, the parent company of Mamaearth, aims to raise up to INR 1,700 Cr through this IPO. Prior to the public offering, Honasa secured INR 765.2 Cr from anchor investors.

Honasa Consumer’s portfolio includes brands such as Mamaearth, Aqualogica, The Derma Co., Ayuga, BBlunt, and Dr. Sheths which are distributed via both marketplace and offline channels.

The IPO is set to close on Thursday, November 2. Despite the lukewarm response, it remains to be seen how the IPO will perform in the coming days.

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