Mamaearth IPO subscribed 7.61 times on final day

The initial public offering (IPO) of Honasa Consumer, the parent company of brands like Mamaearth, The Derma Co., and Aqualogica, was subscribed 7.61 times on the final day of the book-building, with institutional investors providing the boost.

The IPO, which had a slow start on day one, received an overwhelming response from investors on day three, with bids of 22 crore shares as against an offer of 2.8 crore shares, according to data available with Indian stock exchanges.

The qualified institutional investors led from the front, bidding 11.50 times, followed by non-institutional investors, who bid 4.02 times. However, the response from retail individual investors was lukewarm as they bid just 1.35 times.

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Honasa Consumer aims to raise Rs 1,701 crore through the IPO, which consists of fresh issuance of shares worth Rs 365 crore and an offer for sale of 4.13 crore shares and will see few of its existing investors tendering in the issue.

The company had set a price band of Rs 308-324. It has already raised Rs 765.2 crore from 49 investors on October 30 at Rs 324 per share with a face value of Rs 10.

Investors, including Fidelity Funds, Abu Dhabi Investment Authority, Smallcap World Fund, Government Pension Fund Global, Carmignac Portfolio, and Goldman Sachs, participated in the round.

Honasa's IPO is a sort of litmus test for the Indian startup ecosystem on how the market will respond to its public listing.

In an earlier interview with YourStory, Co-founder Ghazal Alagh said that Honasa Consumer intends to replicate its Mamaearth playbook to the other brands. “We have built sufficient strength and capability to use Mamaearth’s business principles in other brands,” she had said.

According to its red herring prospectus filed last week, Honasa will use some part of the proceeds towards strategic acquisitions to expand its house-of-brands portfolio.