Skincare Firm Mamaearth’s Parent Puts IPO on Hold: Report

Indian skincare startup Mamaearth has put its preliminary public providing (IPO) on maintain due to weak market situations, two individuals with direct data of the matter stated, a month after two different Indian firms additionally scrapped their share gross sales.

Mamaearth mum or dad Honasa Consumer Ltd filed its paperwork for an IPO in December, planning to boost about $200 million to $300 million, via the issuing of recent fairness and a proposal on the market of some present shares, which might have valued the corporate at as much as $3 billion.

Backed by buyers akin to Sequoia Capital and Belgium’s Sofina, Mamaearth is now in a “wait and watch mode”, the sources said, given the turbulence in stock markets globally amid worries about the financial health of banks.

Founded in 2016 by the husband and wife duo of Varun and Ghazal Alagh, Mamaearth has been betting on India’s booming beauty and personal care market, which is estimated to expand to $30 billion by 2026 and has been growing by 12% a year, per the company’s IPO papers. Mamaearth was last valued at $1.2 billion in January 2022.

Mamaearth planned to start marketing the IPO and begin initial talks with investors by the end of January, but that has not happened yet, the sources said. In preliminary informal checks with investors, there was a difference in the valuation that the company was seeking and what investors were willing to give, one of the sources said.

The company has until December to receive approval for the IPO from the Securities and Exchange Board of India (SEBI) and file its final prospectus. It still plans to list, but with a delay, the sources said. It may reevaluate market conditions and start its marketing process by October if the sentiment improves, they said.

Mamaearth Chief Executive Varun Alagh did not specifically comment on the IPO being put on hold but said the company would not be “optimising for short-term valuations, we are in this for the long term”.

Alagh stated Mamaearth was partaking with SEBI for approval and would seek the advice of with bankers after that.

He added that its largest investor, Sequoia, wouldn’t be promoting any shares within the IPO and the founders would personal greater than 97 per cent of their shares after the IPO.

Last month, Indian attire retailer Fabindia, backed by billionaire Azim Premji’s fund, and jewelry retailer Joyallukkas scrapped their IPOs on account of poor market situations.

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