Honasa Consumer: Mamaearth shares slip 5% during second trading session

After a dud listing, shares of Honasa Consumer fell during the trading session on Wednesday as investors looked to exit the counter. The parent company of Mamaearth witnessed a flat listing on Tuesday but saw some buying interest on its maiden trading session.

Honasa Consumer shares were listed at par on BSE at Rs 324 and a premium of 2 per cent on NSE at Rs 330 apiece. However, the stock saw some initial buying interest and surged about 5 per cent to Rs 340 on BSE on Tuesday but finally ended the session at Rs 337.15, 4 per cent up the issue/listing price.

However, the stock saw investors exit on Wednesday, falling 5 per cent from previous sessions low at Rs 320.65. Market capitalization of Honasa Consumer slipped below Rs 10,500 crore mark but its was mostly hovering around its issue price of Rs 324 in the fag end of the session.

Trading volumes of Mamaearth remained thin as only 2.09 lakh shares worth Rs 6.87 crore were traded on BSE, whereas 26.77 lakh equity shares amounting to Rs 87.76 crore of Honasa Consumer were trading on the National Stock Exchange (NSE) until the last 10 minutes of the session. However, the majority of the stake is under mandatory lock-in as per Sebi regulations.

Majority of the analysts were not positive on Honasa Consumer even during the IPO. Analysts mostly suggested exiting the counter after a muted listing and park funds in the better alternatives.

Anushi Vakharia, Research Analyst, StoxBox remained cautious with the company’s ongoing struggle to fortify its bottom line despite its recent attainment of profitability and ensure a sustainable earnings growth demand going forward. She advised investors to book profits on the listing day and revisit the company's consistent and sustainable improvement in profitability.

Other analysts expected downside in the stock and raised red flags. Mahesh M. Ojha, AVP - Research at Hensex Securities also believed the IPO is overpriced and investors shall book the entire stake on the listing day itself and can re-enter at lower levels.
 

Honasa Consumer sold its shares in the range of Rs 304-328 with a lot size of 46 equity shares to raise a total of Rs 1,701.44 crore via IPO route. The issue included a fresh share sale of Rs 365 crore and offer for sale of 5.25 crore equity shares. The issue was open for bidding between October 31 to November 2.

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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