Skincare unicorn Mamaearth puts IPO on hold amid poor market conditions, says report
- ByStartupStory | March 28, 2023
Skincare startup Mamaearth has reportedly put its initial public offering (IPO) on hold amid turbulence in global stock markets and concerns over the financial health of banks. The company, which is backed by investors including Sequoia Capital and Sofina, is said to be in a “wait and watch mode”. Mamaearth’s parent company, Honasa Consumer, had filed for an IPO in December with plans to raise between $200 million and $300 million through new equity and the sale of some existing shares. However, with the Nifty trading 10% below its peak and recent IPOs below their issue prices, Mamaearth has decided to delay its IPO for now.
Skincare unicorn Mamaearth has denied reports that it is seeking a valuation of up to $3 billion, stating that there is no mention of valuation in its draft red herring prospectus (DRHP). Mamaearth, which was valued at $1.2 billion in January 2022, had filed for an initial public offering in December 2021 to raise between $200 million and $300 million through new equity and the sale of some existing shares, but has reportedly put the IPO on hold amid turbulence in global stock markets and concerns over bank finances.
Although the IPO has been put on hold due to turbulent global stock markets and concerns over bank finances, the company still intends to list, albeit with a delay. Mamaearth may re-evaluate market conditions and begin its marketing process by October if sentiment improves, sources said. Mamaearth CEO Varun Alagh confirmed that Sequoia, the company’s largest investor, would not be selling any shares in the IPO, and the founders would own more than 97% of their shares following the IPO.
In recent months, Indian markets have seen subdued sentiment in the primary market, with several companies abandoning their initial public offerings (IPOs) due to poor market conditions. Fabindia, an apparel retailer backed by billionaire Azim Premji’s fund, and jewelry retailer Joyallukkas were among the companies that scrapped their IPOs last month. Market data shows that most of the last 10 IPOs listed on stock exchanges are still trading below their issue prices, while investors have been cautious with expensive valuations and weak financial performance.
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