Shares of Honasa Consumer , the parent of Indian skincare firm Mamaearth, were up as much as 4.2% in their trading debut on Tuesday, valuing the startup at 108.62 billion rupees ($1.30 billion).
The stock, which climbed to a high of 337.60 rupees in early trade after opening at 330 rupees, briefly fell below its initial public offer (IPO) price of 324 rupees.
The benchmark Nifty 50 index was down 0.2%.
Companies focused on personal care and cosmetics have seen a jump in demand for their products after the pandemic as awareness on self-care grew.
“Consumers have become a lot more conscious about the quality of chemicals that they end up actually using and so they’re looking for cleaner and organic products. That is going to be a larger long-term trend … this product preference is where Mamaearth is directly positioning themselves,” said Siddarth Pai, founding partner at 3one4 Capital, which tracks the Indian consumer sector.
Last week, the company’s IPO received robust interest from investors who oversubscribed its shares on offer by 7.6 times, bidding for more than 220 million shares, exchange data showed.
It had put the plan on hold in March blaming weak market conditions.
Mamaearth, founded by former Hindustan Unilever executive Varun Alagh and his wife Ghazal in 2016, revisited its IPO plan last month, with a reduced offer size.
The Indian beauty and personal care market is estimated to expand to $28 billion by 2025 from $17.8 billion in 2020, according to KKR-backed financial services firm Avendus.