Honasa Consumer's IPO Receives 12% Subscription on Day 1

31 Oct 2023 , 08:11 PM

The Honasa Consumer IPO witnessed a 12% subscription on October 31, the initial day of bidding. Investors bought 36.07 lakh equity shares against the offer size of 2.89 crore shares.

Retail investors placed bids for 34% of the shares allotted to them, while high net-worth individuals secured 3% of their reserved portion. Qualified institutional buyers subscribed to 10% of their allocated shares.

The parent company of the beauty and personal care brand Mamaearth has allocated 75% of the net issue size for qualified institutional buyers, 15% for high net-worth individuals, and the remaining 10% for retail investors.

Employees, with Rs 1 crore worth of shares reserved in the IPO, oversubscribed their quota by 1.97 times. The net issue excludes the employee share.

Employees will receive the reserved shares at a discounted rate of Rs 30 per share compared to the final issue price. The price band for the offering, scheduled to close on November 2, is set at Rs 308-324 per share.

Honasa, owned by Varun Alagh and his wife Ghazal Alagh, aims to raise Rs 1,701 crore through the maiden public issue. This includes a fresh issuance of shares worth Rs 365 crore by the company and an offer-for-sale (OFS) of 4.13 crore equity shares by a few shareholders, including Sofina, Stellaris, Kunal Bahl, Rohit Kumar Bansal, and Shilpa Shetty Kundra.

Of the net fresh issue proceeds, the Gurugram-based direct-to-customer company plans to allocate Rs 182 crore for advertisement expenses to enhance brand visibility, Rs 20.6 crore for establishing new exclusive brand outlets (EBOs), and invest Rs 26 crore in its subsidiary, BBlunt, for setting up new salons. The remaining portion of the proceeds will be used for general corporate purposes and unidentified inorganic acquisitions.

Before the IPO opening, on October 30, Honasa secured Rs 765.2 crore from various anchor investors, including Smallcap World Fund Inc, Fidelity Funds, Abu Dhabi Investment Authority, Government Pension Fund Global, Carmignac Portfolio, Goldman Sachs, ICICI Prudential Mutual Fund, Aditya Birla Sun Life Trustee, Axis Mutual Fund, Whiteoak Capital MF, SBI Life Insurance Company, Aditya Birla Sun Life Insurance Company, and ICICI Prudential Life Insurance Company.