Honasa Consumer IPO gets subscribed 6.09 times so far; should you subscribe? Here is what Anil Singhvi recommends

Honasa Consumer IPO: Honasa Consumer—which owns new-age FMCG brands Mamaearth and The Derma Co—on Tuesday launched an initial public offer (IPO) worth an estimated Rs 1,701 crore. The subscription window for the public offer will be available from 10 am to 5 pm for three trading days, ending November 2. 

The Mamaearth IPO comprises the fresh issuance of equity worth Rs 365 crore and an offer for sale (OFS) worth Rs 1,336 crore. Those offering shares in the OFS include promoters Varun Alagh and Ghazal Alagh, and investors like Fireside Ventures Fund, Sofina, Stellaris, Kunal Bahl, Rohit Kumar Bansal, Rishabh Harsh Mariwala, and actor Shilpa Shetty Kundra.  

Honasa Consumer IPO subscription status

On Thursday (Day 3), Honasa Consumer IPO's share sale received bids for 17,60,35,974 shares against 2,88,99,514 shares on offer. The category for Qualified Institutional Buyers (QIBs) had received 10.21 times subscriptions. The non-institutional investors' part got subscribed 1.31 times, while the quota for Retail Individual Investors (RIIs) got subscribed 0.93 times. Overall, the public issue has been subscribed 6.09 times so far on Day 3 of the bidding process.

Honasa Consumer IPO: Should you subscribe? Here’s what Anil Singhvi recommends

Zee Business Managing Editor Anil Singhvi suggests only investors with a high risk appetite apply for the issue from a long-term perspective.

He points out the following key points about Honasa Consumer:

Positive

• Young and energetic promoters
• A strong growth track record
• An asset-light model
• Valuations reasonable on an EV/sales basis
• Big names in the anchor book

Negative

• Huge competition
• Outsourcing of manufacturing is a risk
• Huge ad spends
• Still to come in profit consistently
• Valuations very expensive at the price-to-earnings (PE) ratio of 173  

Here are important things to know about the Honasa Consumer IPO

Honasa Consumer IPO important dates: Listing date, allotment date and more

The basis of the allotment of shares under the IPO of Honasa Consumer will be finalised tentatively on November 7. While successful bidders will get shares credited into their demat accounts on November 9, other participants will have refunds initiated on November 8.

The Honasa Consumer IPO stock is likely to be listed in the secondary market on November 10. The stock will be traded on the bourses BSE and NSE.

The IPO, which opened for subscription on October 31, will conclude on November 2. 

Honasa Consumer IPO issue price and lot size 

Potential investors will be able to bid for Honasa Consumer shares, under the IPO, in a price band of Rs 308-324 per share in multiples of 46 shares, which translates into Rs 14,168- Rs 14,904.

Honasa Consumer IPO: Book-running lead managers, registrar

While Kfin Technologies is the official registrar of the issue,Kotak Mahindra Capital Company, Citigroup Global Markets India, JM Financial, and JPMorgan India are the book-running lead managers. 

Honasa Consumer IPO: Fund Utilisation

Proceeds from the fresh issue would be utilised towards advertising expenses to improve awareness and brand visibility, setting up new exclusive brand outlets, investment in its subsidiary BBlunt for setting up new salons, general corporate purposes, and inorganic acquisition.

What does Honasa Consumer do?

The Gurugram-based beauty and personal care company was founded in 2016 by the 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. In January 2022, the company had entered the unicorn club.

With inputs from PTI

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