Mamaearth, the direct-to-consumer (D2C) unicorn, saw a remarkable oversubscription of 7.61 times on the final day of its initial public offering (IPO) due to significant demand from qualified institutional buyers (QIBs).
Bids for 22 crore shares were submitted compared to the 2.89 crore shares available. Qualified institutional buyers (QIBs) contributed 82% of the total bids.
Out of the 1.57 crore shares available for the QIB category, it garnered bids for 18.11 crore shares, resulting in an oversubscription of 11.5 times. Notably, foreign institutional investors (FIIs) submitted bids for 14.88 crore shares.
Conversely, the non-institutional investors’ (NIIs) category experienced an oversubscription of 4.02 times by the close of the final day. Out of the 78.72 lakh shares available in this category, bids were received for 3.17 crore shares.
Nevertheless, it appeared that retail investors showed relatively modest interest in Mamaearth’s IPO. Their allocated portion was oversubscribed by a factor of 1.35, with bids coming in for 70.67 lakh shares, compared to the 52.48 lakh shares available for the category.
By the close of the second day, the retail investors’ portion was subscribed at 0.62 times, the QIBs quota saw an oversubscription of 1.02 times, and the NIIs portion had the lowest subscription at 0.09 times.
Read More: Mamaearth’s IPO sees surge in subscriptions, reaches 0.7X on day 2
At the end of day 3, the subscription for the employees’ portion reached 4.88 times, with bids received for 1.65 lakh shares.
Mamaearth initiated its IPO on Tuesday, October 31, with the startup aiming to raise a maximum of INR 1,700 Crores at a valuation of $1.2 billion.
Read More: Mamaearth IPO to open on October 31, price band announced at INR 308 to INR 324 per share
Mamaearth’s public offering consists of newly issued shares valued at INR 365 Crores and an offer for sale (OFS) component of 4.12 Crore shares. The IPO price range was established between INR 308 to INR 324 per share.
Established in 2016 by the husband-wife team of Varun and Ghazal Alagh, Honasa Consumer, the company behind Mamaearth, also offers a range of beauty and personal care brands, which include The Derma Co., Ayuga, Aqualogica, and Dr Sheth’s.
Following its listing, the company will mark the fifth new-age tech startup to go public this year, joining the ranks of ideaForge, Yudiz, Zaggle, and Yatra. Among these firms, the drone startup ideaForge achieved the highest subscription rate at 106 times. Upon listing, ideaForge shares debuted on the BSE with a remarkable 94% premium over the issue price.
Mamaearth posted a net loss of INR 151 Crores in FY23, primarily attributed to a one-time loss. This loss, combined with the substantial OFS portion in the public offering, has raised apprehensions in certain circles regarding the IPO’s performance.
There were also apprehensions among some analysts regarding the startup’s valuation.