Honasa Consumer, the parent company of Mamaearth, had a lukewarm start on the stock market on November 7. The shares debuted at Rs 330 on the NSE and Rs 324 on the BSE, slightly higher than the issue price of Rs 324. Analysts now advise investors to consider selling and exiting due to financial challenges and risks in operations.
The company offers various products like skincare, baby care, hair care, cosmetics, and fragrances. However, its financial health faces uncertainty, and there are risks related to its operations, according to Shivani Nyati from Swastika Investmart Ltd. Nyati recommends investors to sell their shares to make a profit and leave their positions.
Mamaearth’s IPO had good interest from institutional buyers but cautious participation from retail investors. The company reported a loss of Rs 150.9 crore in the year ending March 2023, mainly due to losses on intangible assets, differing from the previous year’s profit of Rs 14.4 crore.
Prashanth Tapse, a research analyst at Mehta Equities, remains wary about Mamaearth due to its loss-making nature, a considerable portion of shares for sale, tough competition affecting profit margins, low stake from promoters, and weak financials.