Honasa Consumer (Mamaearth) IPO Lists 1.85% Higher, Continues to Gain

Honasa Consumer IPO (Mamaearth) had a very tepid day of listing on 07th November 2023, listing at a smart premium of just 1.85%. However, after a relatively volatile day, the stock did manage to close above the IPO price and also marginally above the listing price. However, it failed to really build on the early listing gains on 07th November 2023. The closing price on 07th November 2023 was above the IPO issue price for the day, and also marginally above the listing price of the IPO; albeit very marginal gains on both fronts. For the day, the Nifty closed 5 points lower while the Sensex closed 16 points lower. Both the Nifty and the Sensex struggled in a range through the day, and hence in comparison, this performance by Honasa Consumer Ltd (Mamaearth) on the day of listing is not really bad. However, for the investors, the listing surely left a lot to be desired.

IPO subscription and pricing details for Honasa Consumer IPO (Mamaearth)

The stock had seen a very moderate to above average subscription in the IPO. The subscription was 7.61X  overall and QIB subscription was at 11.50X. In addition, the retail portion had got subscribed just about 1.35X in the IPO while the HNI / NII portion also got a healthier subscription of 4.02X. Hence the listing was expected to be moderate at best for the day of listing. However, while the listing was very moderate, the post listing performance was not up to the mark. It struggled through most part of the day and finally closed the day marginally higher than the listing price. Remember, the circuit filter for the Honasa Consumer Ltd (Mamaearth) IPOs has been set at 20% above and below the listing price of the day on the day of listing. In the case of Honasa Consumer Ltd (Mamaearth), the relatively moderate subscription allowed price discovery at the upper end of the band and got a relatively moderate listing, but the close was only marginally better.

The IPO price was fixed at the upper end of the band at ₹324 per share which was anyways along expected lines considering the relatively moderate and above average subscription in the IPO. The price band for the IPO was ₹308 to ₹324 per share. On 07th November 2023, the stock of Honasa Consumer Ltd (Mamaearth) listed on the NSE at a price of ₹330 per share, a tepid premium of 1.85% above the IPO issue price of ₹324 per share. On the BSE, the stock listed at ₹324 per share, which is exactly the IPO price, so there was no premium or discount on listing on the BSE. Here is the Honasa Consumer Ltd (Mamaearth) listing story on 07th November 2023.

How the stock of Honasa Consumer IPO (Mamaearth) closed on both exchanges?

On the NSE, Honasa Consumer IPO (Mamaearth) closed on 07th November 2023 at a price of ₹337.30 per share. That is a first day closing premium of 4.10% on the issue price of ₹324 per share. However, it marks a marginal premium of just about 2.21% above the listing price of ₹330 per share. In fact, the listing price turned out to be roughly the mid-point of the day. On the BSE also, the stock closed at ₹337.15 per share. That represents a first day closing premium of 4.06% above the IPO issue price.

However, since the opening was exactly at the IPO price, this closing price of the day also reflects a return of 4.06% on the listing price of the day. On both the exchanges, the stock listed flat to marginally above the IPO issue price and also managed to close Day-1 above the IPO issue price. However, the pressure of selling was visible on the counter in both the stock exchanges. In fact, on the NSE and the BSE, the stock happened to be quite volatile in a range before settling higher. On the other hand, the closing price on both the NSE and the BSE represented a premium over the IPO issue price as well as a premium over the IPO listing price of the day for Honasa Consumer Ltd (Mamaearth).

Remember, that, on the NSE, the Honasa Consumer Ltd (Mamaearth) is subject to 20% circuit filters on both side. The upper circuit filter on the NSE was ₹396 per share while the lower circuit price on the NSE was ₹264 per share. In comparison, the high price of the day at ₹340.45 per share was much below the upper circuit price. Even the low price of the day at ₹321.10 per share was much above the lower circuit limits for the day.

Price volume story on the NSE

The table below captures the opening price discovery in the pre-open period on the NSE.

Data Source: NSE

Let us look at how the stock traversed on the National Stock Exchange (NSE) on 07th November 2023. On Day-1 of listing, Honasa Consumer Ltd (Mamaearth) touched a high of ₹340.45 per share on the NSE and a low of ₹321.10 per share. During the day, the premium to the listing price and the premium to the IPO price got tested. The opening and closing price of the day were well in between the high and low price of the day showing that the stock was volatile in a range but closed the day eventually in the positive. Normally, mainboard IPOs like Honasa Consumer Ltd (Mamaearth) do not have an upper circuit of 5%, unlike SME IPOs since they trade in the normal equity segment and not in the trade to trade segment. However, on listing day, this IPO was subjected to the standard 20% upper and 20% lower circuit limit, applicable on the listing price of the day.

The High Price of the day at ₹340.45 per share was well below the upper circuit price of ₹396 per share. Similarly, the Low Price of the day at ₹321.10 per share which was well above the lower circuit price of ₹264 per share. On Day-1 of listing, the Honasa Consumer Ltd (Mamaearth) stock traded a total of 301.26 lakh shares on NSE amounting to value of ₹998.92 crore during the day.  The order book during the day showed a lot of back and forth with the bias clearly in favour of the sellers, although buying did emerge in the end. For the day, Honasa Consumer Ltd (Mamaearth) closed with pending buy orders of 9,982 shares.

Price volume story on the BSE

Let us look at how the stock traversed on the Bombay Stock Exchange (BSE) on 07th November 2023. On Day-1 of listing, Honasa Consumer Ltd (Mamaearth) touched a high of ₹340 per share on the BSE and a low of ₹322 per share. During the day, the premium to the listing price and the premium to the IPO price got tested. The opening and closing price of the day were well in between the high and low price of the day showing that the stock was volatile in a range but closed the day eventually in the positive. Normally, mainboard IPOs like Honasa Consumer Ltd (Mamaearth) do not have an upper circuit of 5%, unlike SME IPOs since they trade in the normal equity segment and not in the trade to trade segment. However, on listing day, this IPO was subjected to the standard 20% upper and 20% lower circuit limit, applicable on the listing price of the day.

The High Price of the day at ₹340 per share was well below the upper circuit price of ₹388.75 per share. Similarly, the Low Price of the day at ₹322 per share was also well above the lower circuit price of ₹259.20 per share. On Day-1 of listing, the Honasa Consumer Ltd (Mamaearth) stock traded a total of 8.22 lakh shares on NSE amounting to value of ₹27.21 crore during the day.  The order book during the day showed a lot of back and forth with the bias clearly in favour of the sellers, although buying did emerge in the end. For the day, Honasa Consumer Ltd (Mamaearth) closed with pending buy orders for the day on BSE.

Market capitalization, free float, and delivery volumes

While the volumes on the BSE were not as much as on the NSE, the trend was once again the same. The order book through the day showed a lot of pressure and that almost sustained till the close of trading session, with some buying emerging towards the end of the trading session on both exchanges. The Nifty and the Sensex were flat to marginally negative in the day. On the NSE, out of the total 301.26 lakh shares traded during the first day of trading, the deliverable quantity represented 182.07 lakh shares or a deliverable percentage of 60.44% on the NSE, which is higher than the routine listing day median. That shows a lot of delivery action in the counter. Even on the BSE, out of the total 8.22 lakh shares of quantity traded, the deliverable quantity at a gross across client level was 3.09 lakh shares representing total deliverable percentage of 37.62%, which is much lower than the delivery ratio on the NSE. Unlike the SME segment stocks, which are on T2T on the day of listing, the mainboard IPOs permit intraday trading even on the day of listing.

At the close of Day-1 of listing, Honasa Consumer Ltd (Mamaearth) had a market capitalization of ₹10,847.69 crore with free-float market cap of ₹2,603.45 crore. Honasa Consumer Ltd (Mamaearth) has issued capital of 3,217.47 lakh shares with a par value of ₹10 per share.