Mamaearth IPO: Should you subscribe? Here's what top 5 brokerages say on Honasa Consumer's book build issue

livemint.com:

Honasa Consumer IPO: The Initial Public offering (IPO) of Mamaearth parent Honasa Consumer Limited hit primary market today. This means, subscription for the Mamaearth IPO has opened today and it will remain open for bidding till 1st November 2023.

The main board issue has been offered at a price band of ₹308 to ₹324 per share. Honasa Consumer Ltd, the owner of FMCG brands such as Mamaearth and The Derma Co, on Monday allotted 2.36 crore equity shares to 49 anchor investors and raised ₹765.20 crore ahead of the company’s proposed IPO.

So, it would be interesting to know whether one should subscribe for the book build issue or not. As per the top 5 brokerage firms — Axis Capital, Canara Bank Securities, Emkay Global, HDFC Securities and Ventura Securities — one brokerage has given 'subscribe' tag to this public issue while four have not rated this book build issue.

The brokerage that has suggested applying for the public offer is Emkay Global. Giving 'subscribe' tag to Mamaearth parent's Honasa Consumer IPO, Emkay Global said, "We assess the stock’s valuation for three scenarios (considering the upper-end of the band): i) Attractive (EV/sales of 3.5x and EV/EBITDA of 29x for FY26E), if Company doubles revenue in three years and improves OPM to ~12%; ii) Fair (EV/sales of 4.2x and EV/EBITDA of 41.7x for FY26E), if Company sees revenue CAGR of 20% with OPM of 10%; and iii) Expensive (EV/sales of 5.2x and EV/EBITDA of 87x for FY26E), if Company registers revenue CAGR of ~10% and maintains margin at ~6%)." Axis Capital, HDFC Securities, Canara Bank Securities and Ventura Securities have not rated the public issue.