Mamaearth co-founder Ghazal Alagh clears IPO valuation rumours
- ByStartupStory | January 4, 2023
Ghazal Alagh, a co-founder of Mamaearth, responded to rumours on social media and press stories about the company’s valuation for its initial public offering (IPO), saying the company has not quoted nor subscribes to the valuation figures circulating.
Alagh wrote in a LinkedIn post, “Valuation discovery is a process which will take place over time as we get into deeper conversations with the investor community.”
The parent company of Mamaearth, Honasa Consumer Ltd, submitted its draft red herring prospectus for an IPO with the Securities and Exchange Board of India (Sebi), according to an ET story from December 29.
The transaction would consist of an offer-for-sale (OFS) component with 46.82 million shares and a fresh issuance of shares worth Rs 400 crore.
Varun Alagh and Ghazal Alagh, as well as investors Sofina, Fireside Ventures, Evolvence India, Stellaris, and angel investors like Kunal Bahl, Rohit Bansal, Rishabh Mariwala of FMCG giant Marico, and actor Shilpa Shetty Kundra, will all part with their ownership interests in the company during the OFS.
Twitter has been used by some to raise concerns about the company’s IPO prospects.
One of the users, who is a chartered accountant, said, ““Even if it is assumed that funding of Rs 400 crore will take the profits of the company to Rs 240 crore and assuming 100% profit to be given as dividend and the startup grows further at an inflation rate, it will take a poor investor 100 years (val Rs 24,000 crore) to recover his money.”
Concerns regarding the IPO, particularly its timing, have been raised by some market experts. In light of recent market turbulence and financial difficulties, startups like Boat and Snapdeal recently delayed their preparations for initial public offerings (IPOs).
Mamaearth said in January 2022 that Honasa Consumer, the parent business, had raised $52 million in funding from Sequoia Global at a valuation of $1.15 billion, becoming a member of the unicorn club.
Existing investors including the Belgian Sofina Ventures SA and new funds like the UAE-based Evolvence also participated in the round.
In connection with Mamaearth’s IPO, Sequoia is not taking part in the OFS.
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