On Friday, shares of Honasa Consumer Ltd, the company behind the skincare brand Mamaearth, were trading nearly 5% lower than their initial public offering (IPO) price of INR 324 per share.
As of 11:02 AM IST, the company’s shares were valued at INR 287.45 on the National Stock Exchange (NSE). Nevertheless, during early trading, the stock experienced a decline, reaching as low as INR 256.30, marking a 15% decrease from the previous day’s closing price.
The company’s most recent market capitalization stood at INR 9,248.61 crore but dipped to INR 8,246 crore before partially recovering from the losses. The initial public offering (IPO) valuation of the company was approximately INR 10,425 crore.
In 2022, the latest private funding round for Honasa assigned a valuation of $1.2 billion to the omnichannel retailer, equivalent to approximately INR 9,995 crore at the exchange rate on Friday.
On Tuesday, November 7, Honasa Consumer’s shares debuted on the NSE at INR 330 per share, representing a 2% premium over the issue price. Subsequently, the stock witnessed substantial selling activity in the market.
Read More: Mamaearth marks its entry on NSE with nearly 2% premium debut
The Honasa initial public offering (IPO) commenced on October 31, featuring a price range of INR 308-324 per share and concluded on November 2. The IPO successfully garnered INR 1,701 crore, comprising a fresh issue of INR 365 crore and an offer-for-sale component involving up to 4.12 crore equity shares valued at INR 1,336 crore.
Read More: Mamaearth IPO to open on October 31, price band announced at INR 308 to INR 324 per share
Prior to the IPO opening for public subscription, Honasa Consumer had secured INR 765.19 crore from anchor investors, a list featuring prominent names such as Abu Dhabi Investment Authority, Fidelity, Goldman Sachs, Capital Group, and Norges Bank.
Read More: Honasa’s Mamaearth IPO attracts INR 765.2 Crore from anchor investors ahead of IPO launch
During an interview, Varun Alagh, the co-founder and chief executive of the company, cautioned against forming opinions about a company solely based on its short-term stock market performance. “If you’re trying to measure performance over 3-6 months, you should not … If you genuinely like a company, stay invested for a few years and measure our performance over the index, and that’s what one should hold the company accountable to,” Alagh had said.