Honasa, which owns direct-to-consumer skin and baby care brands Mamaearth and The Derma Co, attracted marquee anchor investors including Capital Group, Fidelity, Norges Bank Investment Management, Abu Dhabi Investment Authority, White Oak, First State, Templeton, Nippon Mutual Fund and ICICI Prudential Mutual Fund. We are hoping this will give momentum to the stock and ensure a decent listing,' an ECM source said. 'We didn't expect the high-net-worth investor bids to be more than one time, given the recent weakness in the market. Stock exchange data showed the institutional tranche of Honasa's IPO was covered 11.5 times, the non-institutional segment 4.02 times and the retail tranche 1.35 times.Īnalysts said although overall subscription was lower than the 10 times expectation, the non-institutional interest was encouraging. Although Narendra Modi's ruling Bharatiya Janata Party is expected to remain in power, any other result could lead to a sharp stock market correction and halt issuance. Foreign portfolio money could flow back into China if that market recovers next year, he said.īankers expect the first quarter to be active, ahead of India's federal election in May. However, he said that deals will need to be executed quickly to take advantage of investor interest. 'India is in a multi-year sweet spot,' another ECM banker said, pointing out that IPOs were still getting priced at four to five times enterprise value/sales compared to the regional average of very low single digits. The Sensex trades at a rich price-to-earnings multiple of 21 compared with 10–17 times for other major Asian markets, given the positive outlook for the economy.Ī Hong Kong-based ECM banker said around 30 technology, e-commerce or fintech IPOs can be expected in India over the next 24–36 months. The benchmark S&P BSE Sensex Index is up 5.7% this year though it has lost some gains, having fallen 2.5% in the quarter to date. With fewer Chinese technology and South-East Asian IPOs in the market, bankers are pinning their hopes on Indian deals. The shares were sold at Rs487 but closed at Rs401.25 on Thursday. The last major technology IPO was SoftBank-backed online logistics company Delhivery's Rs52.4bn deal in May 2022, which has disappointed in the secondary market. Skin and baby care e-commerce company Honasa Consumer, which is backed by Bollywood actress Shilpa Shetty Kundra, drew subscription of 7.61 times for its Rs17bn (US$204m) IPO, raising hopes that it can reopen India's technology and e-commerce deal pipeline.Īfter a very active 2021, technology and e-commerce IPOs have generally stayed away from the Indian market.

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