Why this $100 million fund manager won't invest in Mamaearth, not right now
Discussing the Mamaearth IPO with CNBC-TV18, Envision Capital's Nilesh Shah, who manages funds worth over $100 million (₹835 crore), said Mamaearth is a good brand and has good products but he won’t invest in the stock right now.
In a candid discussion about the much-anticipated Mamaearth IPO on CNBC-TV18, Nilesh Shah of Envision Capital acknowledged the strength of the brand and its products but indicated he wouldn't be investing in it at present. He lauded the company's market presence and projected a significant revenue surge in the next 5-10 years.
"I would probably give it a pass right now. I think the business is great, the brand is selling, and the products are selling, undoubtedly. Therefore, in the next 5-10 years, this business – probably from ₹1,000 crore – will become ₹5,000-10,000 crore revenue company," said Shah who manages a portfolio worth over ₹835 crore.
The initial public offering (IPO) of Honasa Consumer, the parent of direct-to-consumer (DTC) brand Mamaearth, opened for subscription on Tuesday, October 31.
The Mamaearth IPO includes a fresh equity issue of ₹365 crore and an offer for sale of about 4.12 crore shares. The price band of the IPO has been set at ₹308-324 per equity share.
On Thursday, November 2, the last day of the IPO, the Mamaearth GMP or grey market premium was a marginal ₹9. The grey market is an unofficial platform where IPO shares can be bought and sold before the listing.
The Street is divided on the IPO's prospects, with some recommending a subscription for those looking at a medium to long-term investment horizon, and others urging caution before committing.
Also Read | Interview: Mamaearth Chairman promises fast and, yet, profitable growth as valuation drops to ₹10,000 crore
Nilesh Shah also weighed in on the general market trends, affirming his belief in the current upward movement and robust earnings from diverse industries. Certain elements like fluctuating crude oil prices, West Asian geopolitical tensions, and India's forthcoming elections might hold investors back, he noted.
In sectoral trends, he anticipates a stronger price performance in midcap and smallcap information technology (IT) companies if their growth momentum sustains.
For more details, watch the accompanying video
(Edited by : Shweta Mungre)
First Published: Nov 2, 2023 1:36 PM IST
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