Mamaearth, which is backed by investors such as Sequoia Capital and Belgium’s Sofina, is currently in a “wait and watch mode.” This is due to turmoil in global stock markets and concerns about the financial health of banks.
According to a report, skincare firm Mamaearth has placed its initial public offering (IPO) on hold, at a time when the Nifty is trading 10% below its top and most recent debutants are selling below their issue prices.
Mamaearth, which is backed by investors such as Sequoia Capital and Belgium’s Sofina, is currently in a “wait and watch mode,” according to a source, citing global stock market volatility and concerns in relation to the financial reliability of banks.
Honasa Consumer, Mamaearth’s parent company, filed IPO papers in December with the intention of raising $200 million to $300 million through the issuance of new equity and the selling of certain existing shares.
While rumors claim Mamaearth intends to pursue a value of up to $3 billion, the unicorn’s co-founder Ghazal Alagh has already stated that they do not adhere to the valuation figures suggested in the media.
Mamaearthhad a value at about $1.2bn in Jan2022.The business has till December to get the Securities and Exchange Board of India’s (SEBI) permission for the IPO and file its final prospectus. According to the article, it still intends to list, albeit with a delay. If market mood improves, it may reassess market circumstances and begin its marketing strategy by October.
According to Varun Alagh (Mamaearth CEO), Sequoia (the company’s largest investor) will not sell any of their shares in the IPO, and so the founders will then control over 97 percent of their shares after the IPO.
Due to unfavorable market circumstances, Indian garment retailer Fabindia, sponsored by billionaire Azim Premji’s fund, and jewelry shop Joyallukkas canceled their IPOs last month.
In the primary market, sentiment has been weak in recent months. According to market statistics, the majority of the previous ten IPOs filed on stock markets are still trading below their issue pricing. Investors have also been harsh on firms with high valuations and a bad bottom line.
