Honasa Consumer IPO: Honasa Consumer IPO, the parent company of Mamaearth, opens for public subscription today and will close on Thursday, November 2, 2023. The price band for its public issue at Rs 308-324 per equity share of face value Rs 10 each. The IPO comprises a fresh issue of shares aggregating up to Rs 365 crore and an offer-for-sale (OFS), with promoters offloading 41,248,162 shares. The lot size of the Honasa IPO is of 46 shares with subsequent bids in multiple lots of 46 equity shares each. The minimum amount of investment required by retail investors is Rs 14,904. Ahead of the public issue, Honasa Consumer shares’ grey market premium (GMP) rose 2.16%, over the upper end of the share price on offer.
The Basis of Allotment is scheduled for Tuesday, November 7, 2023, and the initiation of refunds will take place on Wednesday, November 8, 2023. The expected Credit of Shares to Demat is on Thursday, November 9, 2023, while the expected listing date of shares is Friday, November 10, 2023.
Honasa Consumer (HCL) is a digital platform offering beauty and personal care products in over 500 Indian cities. It has grown popular brands like Mamaearth, The Derma Co, Dr Seth’s, Ayuga and Aqualogica. The company has also made strategic investments in BBLUNT and Momspresso. HCL’s product portfolio includes baby care, face care, body care, hair care, color cosmetics, and fragrances. Backed by prominent investors, HCL is poised to reach a $1 billion valuation.
Should you apply for theHonasa Consumer IPO?
StoxBox: Avoid
“Honasa reported a revenue CAGR of 80% during FY21-23 period to reach Rs. 14,927 million vs. 28% CAGR for other BPC companies and it swung to a EBITDA of Rs. 228 million in FY23 from a loss of Rs. 13,340 million posted in FY21. Based on its annualized FY24 EPS, the IPO appears to be aggressively priced at 97x, discounting all immediate positive factors and seems like the company is leveraging its proven track record to justify a premium valuation. We, therefore, recommend an ‘Avoid’ rating for the issue and would revisit the company following consistent and sustainable improvement in profitability.”
Swastika: Avoid
“The business’ return on advertising has also been consistent for a few years, i.e., 2.5%, thus the company’s client retention is very low. As it is a loss-making company, we cannot derive its actual P/E, but even after considering its outflow in the latest investment, the company is coming at an extremely high valuation. Thus, I will suggest to ‘Avoid’ this IPO.”
(The recommendations in this story are by the respective research analysts and brokerage firms. FinancialExpress.com does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)
