Mamaearth IPO in the works, engaged with regulators: CEO Varun Alagh

Mamaearth Chief Executive Officer and Co-Founder Varun Alagh on Monday dismissed reports that the personal care start-up had scrapped its initial public offering (IPO).

“This is to clarify we are still engaging with Sebi on our DRHP (draft red herring prospectus) and awaiting formal approval for the same,” said Alagh. “Post the approval, as is in line with the regulations, we will have 12 months to file RHP and take the company public, which we will do in consultation with our bankers.”

Media firm Reuters had reported that Mamaearth’s parent company Honasa Consumer had put the IPO on hold because of weak market conditions. The report, quoting sources, said that Mamaearth’s IPO was on a “wait and watch” mode.

Alagh said that the pricing and valuations would be discovered as part of the firm’s marketing roadshows when it starts them. 

“As discussed during our meeting, neither is our largest investor selling a single share, and also the promoters will continue to own over 97 per cent of their ownership in the company after the IPO, hence we have no interest in optimising for short-term valuations, we are in this for the long term,” said Alagh.

The Gurgaon-based firm has raised a total funding of $126 million from investors such as Sequoia and Belgium’s Sofina. Founded by husband-wife duo Ghazal Alagh and Varun Alagh, the firm’s last valuation in January 2022 was at $1.2 billion, when it raised $52 million in a round led by Sequoia.

Honasa Consumer filed its documents in December, with plans to raise about $200-300 million through new equity issue and offer for sale (OFS) of some existing shares. While reports said that Mamaearth was planning to seek a valuation of up to $3 billion, the firm had earlier issued a denial about the valuation numbers.

The firm’s annual profit was Rs 14 crore the last year.

Mamaearth sells its products through its website, as well as, major e-commerce platforms like Amazon, Nykaa, Flipkart and over 100,000 point of sales across the country.