Mamaearth IPO: Public Issue Oversubscribed 7.61X As QIBs Lead The Way

SUMMARY

While 1.57 Cr shares were on offer for the QIB category, it received bids for 18.11 Cr shares and was oversubscribed 11.5X

The retail investors’ portion saw the lowest subscription at 1.35X

Mamaearth is looking to raise up to INR 1,700 Cr via its IPO at a valuation of $1.2 Bn

D2C unicorn Mamaearth’s public issue was oversubscribed 7.61X on the last day of its initial public offering (IPO) on Thursday (November 2) on the back of huge demand from qualified institutional buyers (QIBs).

The issue received bids for 22 Cr shares as against 2.89 Cr shares on offer. The bids by QIBs accounted for 82% of the total bids.

While 1.57 Cr shares were on offer for the QIB category, it received bids for 18.11 Cr shares and was oversubscribed 11.5X. In that, foreign institutional investors (FIIs) placed bids for 14.88 Cr shares.

On the other hand, the non-institutional investors’ (NIIs) category was oversubscribed 4.02X at the end of the last day. Of the 78.72 Lakh shares on offer for the category, it received bids for 3.17 Cr shares.

However, retail investors seemed the least interested in Mamaearth’s IPO. The portion reserved for them was oversubscribed by only 1.35X. Retail investors placed bids for 70.67 Lakh shares as against 52.48 Lakh shares on offer for the category.

At the end of day 2, the retail investors’ portion was subscribed 0.62X, QIBs quota was oversubscribed 1.02X, and the NIIs portion had the lowest subscription at 0.09X.

At the end of day 3, the employees’ portion was subscribed 4.88X, receiving bids for 1.65 Lakh shares.

Mamaearth’s IPO opened on Tuesday (October 31). The startup plans to raise up to INR 1,700 Cr via its IPO at a valuation of $1.2 Bn.

Mamaearth’s public issue comprises a fresh issue of shares worth INR 365 Cr and an offer for sale (OFS) component of 4.12 Cr shares. The IPO price band was set at INR 308-INR 324 per share.

Founded in 2016 by the husband-wife duo of Varun and Ghazal Alagh, Honasa Consumer, the parent of Mamaearth, retails other beauty and personal care brands including The Derma Co., Ayuga, Aqualogica and Dr Sheth’s.

Post its listing, the company would become the fifth new-age tech startup after ideaForge, Yudiz, Zaggle, and Yatra to go public this year. Among these companies, the public issue of drone startup ideaForge saw the highest subscription at 106X. Shares of ideaForge got listed on the BSE at a 94% premium to the issue price.

Mamaearth reported a net loss of INR 151 Cr in FY23 due to a one-time loss. The loss, along with the high OFS portion in the public issue, raised concerns in some quarters about the success of the IPO.

Some analysts also raised concerns on the valuation of the startup.

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