Mamaearth IPO subscribed 7.6 times

Despite noise in the social media, the initial public offering of Honasa Consumer saw a strong response and subscribed 7.61 times on Thursday, the final day of bidding. The ₹1,701-crore initial public offering from the owners of famous Mamaearth outlets, received bids for 22 crore shares against an offer of about 2.9 crore shares. Retail investors and non-institutions, who remained on the sidelines during the first two days of offer, participated on the last day. The quota for retail investors was subscribed 1.35 times and that of non-institutions 4.02 times.

Leading the subscription pack was qualified institutional buyers, whose portion was subscribed 11.50 times followed by employees (4.88 times). For its employees, the company offered a discount of ₹30 a share.

The price band of the issue was ₹308-324.

Issue details

The IPO comprised a fresh issue of equity shares amounting to ₹365 crore and an Offer for Sale of 4.125 shares by promoters, founders, and investors. Co-founders and promoters — Varun Alagh and Ghazal Alagh — and investors such as Fireside Ventures Fund, Sofina, Stellaris, Kunal Bahl, Rohit Kumar Bansal, Rishabh Harsh Mariwala, the son of Harsh Mariwala (Founder and Chairman of Marico), and Bollywood actress Shilpa Shetty Kundra sold shares in the OFS. 

As a part of IPO, the company on Monday raised d ₹765.20 crore from anchor investors. The company allotted 2.36 crore shares to 49 anchor investors at ₹324 a share. Among them included prominent FPIs such as Capital Group (through Smallcap World Fund Inc), Fidelity International Ltd, Norges Bank, Abu Dhabi Investment Authority, First Sentier (First State Investments), White Oak, Franklin Templeton, Kotak, DSP, Carmigniac Gestion, Loomis Sayles, Matthews, Pictet, and Hornbill.

Among the domestic investors were ICICI Prudential, Aditya Birla Sun Life, Nippon, Axis, Canara Robeco, Invesco, and MF of White Oak MF. besides Insurance companies such as SBI Life Insurance, ICICI Life Insurance, Birla Life Insurance, Max Life Insurance, Bajaj Allianz Life Insurance, and Bharti AXA Life Insurance

Utility of funds

Proceeds from the fresh issue will be used for advertising expenses to step up awareness and brand visibility, establishing new exclusive brand outlets, investment in its subsidiary BBlunt for setting up new salons, general corporate purposes, and inorganic acquisitions.

The Gurugram-based beauty and personal care company started with the launch of Mamaearth, and over the years, added several more brands to its bouquet such as The Derma Co, Aqualogica, Ayuga, BBlunt, and Dr Sheth’s.