On Monday, Honasa Consumer Ltd, the holding company of the D2C unicorn Mamaearth, set a new all-time high with its shares reaching INR 374.95. The stock experienced a significant intraday surge of nearly 13% on the BSE.
On November 7, Mamaearth made its debut on the Indian stock exchanges. The NSE listing of the shares began at INR 330, just slightly above its issue price of INR 324. Conversely, on the BSE, the stock had a flat listing.
Following an intraday surge, the stock retraced some of its gains, concluding today’s trading session with a 5.5% increase, closing at INR 350.45 on the BSE.
Mamaearth experienced a tepid reception from the market during its IPO, particularly with retail investors displaying limited interest in subscribing to the issue. Although the public issue was oversubscribed by an overall factor of 7.61X, the retail investors’ portion witnessed a modest oversubscription of just 1.35X.
Following its listing, Mamaearth joined the ranks of the latest loss-making new-age tech companies to go public. This trend follows the pattern observed in 2021, where several entities such as Zomato, Paytm, and PB Fintech went public on the stock exchanges, only to face significant challenges and a downturn in their stock values thereafter.
Consequently, some analysts issued warnings to investors regarding the stock. Prashanth Tapse, a Senior VP Research Analyst at Mehta Equities, had emphasized concerns about the company’s fiscal year 2023 losses, intense competition, a low promoter stake, and a substantial portion of the offer for sale (OFS) in the public issue.
Mamaearth’s initial public offering included an offer for sale (OFS) of 4.12 crore shares and a fresh issue of shares amounting to INR 365 crore.
Following a profitable fiscal year in 2022, the company returned to a loss in fiscal year 2023, reporting a net loss of INR 151 crore.
The company is set to unveil its financial results for the quarter ending on September 30, 2023, later this week.
The present market capitalization of Mamaearth is INR 11,228.96 crore ($1.3 billion).