Mamaearth’s Ghazal Alagh clarifies IPO valuation concerns

In response to social media users raising concerns about the Sequoia- and Sofina-backed company’s demand for valuation, Alagh said, “As is standard practice in our DRHP, there is no mention of valuation.”

“We do not refer or subscribe to the valuation numbers mentioned in various posts on social media,” the co-founder of the personal care products startup wrote in a series of tweets.

Elaborating further, Alagh said, “Valuation discovery is a process that will take place over time as we engage in deeper dialogue with the investor community.”

Netizens have raised valuation concerns since Honsa Consumer Ltd, which owns new age FMCG brands maternal uncle And The Derma Company filed documents with the capital market regulator SEBI to raise funds through an IPO.

‘Devastating’, ‘extortion’ – were some of the words that have been used on Twitter to describe the appraisal demand. Several investors have also taken to social media platforms to say that they will stay away from the IPO.

IPO includes a new issue of value of equity shares 400 crore and offer-for-sale (OFS) component of 4,68,19,635 equity shares by promoters, investors and other sale shareholders, according to the Draft Red Herring Prospectus (DRHP).

Those offering shares in the offer for sale include promoters – Varun Alagh and Gazal Alagh – and investors such as Fireside Ventures Fund, Sofina, Stellaris, Kunal Bansal and Rohit Bansal, Rishabh Harsh Mariwala of FMCG firm Marico and Bollywood actor Shilpa Shetty Kundra .

The offer also includes reservation of up to 10 crore for subscription by eligible employees.

The company was last valued at $1.2 billion in January last year after it raised $52 million from investors, including US-based Sequoia and Belgium’s Sofina.

In January 2022, the company entered the unicorn club. Startups reported consolidated restated profit 15.72 crore in the year ending March 31, 2022, its financial statement showed.

earlier in june reuters had reported that MamaEarth was in talks to raise at least $300 million for an IPO set for this year.

Honasa said it would use about 186 crores from the IPO for advertising expenses.

Kotak Mahindra Capital, Citigroup Global Markets India, JM Financial Limited and JP Morgan India Private Limited are the book-running lead managers to the issue.

The equity shares of the company will be listed on BSE and NSE.

Mamaearth was co-founded by former Hindustan Unilever executive Varun Alagh and his wife Ghazal as a direct-to-consumer brand.