NEW DELHI: Unlike a few initial public offers (IPOs) of recent times that made strong listing gains, Mamaearth’s parent firm Honasa Consume could not generate enough buzz among investors on its debut as shares closed with a premium of only 4% on Tuesday, its first day of listing.
Honasa had raised Rs 1,701 crore via public issue of over 5.2 crore equity shares last week and the issue was subscribed 7.6 times. The stock opened at Rs 330 on the NSE, up 1.85% over the issue price of Rs 324 per share. The shares closed 4.04% higher at Rs 337.10. In comparison, shares of household products manufacturer Cello World on Monday got listed with a premium of 28% against issue price of Rs 648. JSW Infra and Blue Jet debuted with double-digit gains.
Despite the shares closing with a gain, market analysts remain cautious about Honasa owing to expensive valuations. It commanded a market capitalisation of Rs 10,848 crore after the first day’s closing. Prashanth Tapse, senior VP and Research analyst at Mehta Equities, said despite aggressive pricing, risky investors feel the price is good for long-term as the business model has high potential of growth.
Tapse said he continues to remain cautious on Mamaearth on the back of the loss-making nature of the business, high portion of offer for sale (OFS), high competition with margin pressure, low promoter stake, and weak financials which suggest a cautionary stand as historical listings with high valuations have often faced post-listing challenges.
Market cap at Rs 10,848 cr
Honasa commanded a market capitalisation of Rs 10,848 crore after the first day’s closing. Prashanth Tapse, senior VP and Research analyst at Mehta Equities, said he continues to remain cautious on Mamaearth