In a dynamic week for the Indian stock market, three significant financial events have caught the attention of investors and analysts. Honasa Consumer Limited (HCL), known for popular brands like Mamaearth and The Derma Co, is set to make its stock market debut with an Initial Public Offering (IPO). At the same time, city gas distribution firm IRM Energy faced a lackluster stock market entry, and pharmaceutical ingredient maker Blue Jet Healthcare garnered strong subscription numbers for its IPO.
HCL’s IPO Set to Open on October 31, 2023
Honasa Consumer Limited (HCL) has announced its plans to enter the Indian stock market with an IPO scheduled to open on October 31, 2023. The IPO comprises both a fresh issue of up to Rs 365 crore in equity shares and an Offer for Sale (OFS) of up to 41,248,162 equity shares. HCL’s turnaround in Q1-FY24, reporting a net profit of Rs 24.71 crore against a net loss of Rs 11.52 crore in Q1-FY23, signals a positive trajectory for the company’s financial performance. With a gross profit margin of 17.03%, HCL aims to leverage cost efficiency and increase profitability.
Promoters and founders, Varun Alagh and Ghazal Alagh, along with investors like Fireside Ventures Fund, Sofina, Stellaris, Kunal Bahl, Rohit Kumar Bansal, Rishabh Harsh Mariwala, and Bollywood actor Shilpa Shetty Kundra, are among those offering shares in the OFS. The price band for the IPO has been set at Rs 308 to Rs 324 per equity share, with a discount of Rs 30 per equity share for eligible employees in the employee reservation portion.
The net proceeds raised through the fresh issue will be used for advertising expenses, capital expenditure to set up Exclusive Brand Outlets (EBOs), investments in subsidiary Bhabani Blunt Hairdressing Private Limited (BBlunt), and general corporate purposes. The IPO is managed by Kotak Mahindra Capital Company Limited, Citigroup Global Markets India Private Limited, JM Financial Limited, and J.P. Morgan India Private Limited as the Book Running Lead Managers. Investors have until November 2, 2023, to participate in the offering.
IRM Energy’s Lackluster Market Debut
In contrast to HCL’s highly anticipated IPO, IRM Energy faced a disappointing market debut as its shares declined by more than 6% during its first day of trading. The stock finished at Rs 473, down Rs 32, or 6.4% below the issue price of Rs 505. This underwhelming performance came despite the city gas distribution firm’s successful Rs 544-crore IPO, which received over 25 times subscriptions.
Market analysts attributed IRM Energy’s poor listing day performance to broader market selloffs. Despite the challenging start, the company was valued at Rs 1,942 crore at the last close, indicating potential for recovery and growth in the future.
Blue Jet Healthcare’s IPO Gains Momentum
On a more positive note, the initial public offering (IPO) of pharmaceutical ingredient maker Blue Jet Healthcare showed promise. The IPO, valued at Rs 840.27 crore, received bids for 22,416,115 shares, surpassing the 16,999,612 shares on offer. According to NSE data, the non-institutional investors’ category was subscribed 2.84 times, while retail individual investors received 1.37 times subscription. The qualified institutional buyers segment garnered a 9% subscription.
Blue Jet Healthcare’s strong subscription numbers suggest investor confidence in the pharmaceutical sector, which remains a vital part of India’s healthcare industry.
In conclusion, the Indian stock market continues to offer exciting opportunities and challenges. HCL’s upcoming IPO, IRM Energy’s difficult debut, and Blue Jet Healthcare’s encouraging subscription numbers are just a few of the highlights in this dynamic financial landscape. Investors and analysts will be closely monitoring these developments as they unfold.