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Shares of Mamaearth’s parent Honasa Consumer fell 7 per cent on Thursday to ₹299.9 on the NSE after a flat listing on Tuesday. The shares are now well below the IPO offer price of ₹324 apiece.
Allaying concerns
The company’s IPO had sailed through despite criticism from some market pundits and concerns on rich valuations. The category for institutional investors was oversubscribed 11.5 times even as retail investors remained cautious. Overall, the offering received a strong response and was subscribed 7.6 times.
“We would continue to remain cautious on Mamaearth on the back of the loss-making nature of the business, high portion of OFS, high competition with margin pressure, low promoter stake, and weak financials which suggest a cautionary stand as historical listings with high valuations have often faced post-listing challenges,” said Prashanth Tapse, Sr VP - research analyst at Mehta Equities, in a recent note.
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