Home Finance Understanding the Mamaearth IPO: Top 5 Brokerages on Consumer Booked Bill, Explained Here

Understanding the Mamaearth IPO: Top 5 Brokerages on Consumer Booked Bill, Explained Here

by khushahal vishwakarma
Understanding the Mamaearth IPO

Understanding the Mamaearth IPO: The initial public offering (IPO) for Mamaearth is set in the price band of ₹308 to ₹324 per equity share.

Honesta Consumer IPO: The primary market offering of the parent company Honesta Consumer Limited, began today. This means that subscriptions for Mamaearth’s IPO are now open and will continue until November 1, 2023. The main board issue is presented at a price band of ₹308 to ₹324 per share. Companies like Mamaearth and FMCG brands, such as the Dermaco Company, allocated 2.36 crore equity shares to 49 anchor investors on Monday, raising ₹765.20 crore before the proposed IPO.

Honesta Consumer IPO Open: Should You Consider Subscribing? Hence, it’s interesting to know whether one should consider subscribing to a booked bill issue or not. According to the top 5 brokerage firms—Axis Capital, Kenra Bank Securities, MK Global, HDFC Securities, and Ventura Securities—one brokerage has labelled this public issue as ‘Subscribe,’ while four haven’t rated the booked bill issue. MK Global is the brokerage suggesting applying for the public offering.

MK gave Honesta Consumer IPO a ‘Subscribe’ tag, stating, “We assess the stock valuation for three scenarios (keeping an eye on the upper level of the band): i) attractive (EV/sales 3.5x and EV/EBITDA for FY26E at 29x), assuming the company doubles revenue in three years and improves OPM to about 12%; ii) fair (EV/sales for FY26E at 4.2x and 41.7x for EV/EBITDA), if the company sees a 20% revenue CAGR with a 10% OPM; and iii) expensive (EV/sales at 5.2x and 87x for EV/EBITDA for FY26E), assuming a revenue CAGR of around 10% and maintaining a margin of about 6%.”

Axis Capital, HDFC Securities, Kenra Bank Securities, and Ventura Securities haven’t rated the public offering.

Without the public issue’s rating, Axis Capital states, “Honesta increased its revenue from operations by 80.14% CAGR between the financial years 2021 and 2023 (from ₹459.99 crore in FY21 to ₹1,492.75 crore in FY23), while the average revenue CAGR for all BPC companies, for which data was available for the corresponding period, was 28%.”

Discussing Mamaearth’s IPO financial situation in detail, Kenra Bank Securities says, “The company’s revenue grew by 102.28% between financial years 2011-23, with an 80% CAGR. The company’s adjusted EBITDA is 3.4%. Due to the asset-light model in FY23, which allows them to invest more in marketing, technology, and product innovation, the company strives to enhance distribution by creating consistent brand awareness. The available EV/S stands at 6.76x, which appears to be quite valuable. We recommend subscribing for the long term for the issue.”

Disclaimer: The above opinions and suggestions belong to individual analysts or brokerage companies, not Mint. We advise investors to consult certified experts before making any investment decisions.

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