MUMBAI, March 27 (Reuters) – Indian skincare startup Mamaearth has suspended its initial public offering (IPO) over weak market conditions, two people with direct knowledge of the matter said, a month after two other Indian companies also scrapped their stake sale.
Mamaearth’s parent company, Honasa Consumer Ltd, filed for an IPO in December and planned to raise approximately $200-$300 million through the issuance of new equity and an offer to sell some existing shares, giving the company up to could have been valued at $3 billion.
Backed by investors including Sequoia Capital and Belgium’s Sofina (SOF.BR), Mamaearth is now in a “wait and see” mode amid turmoil in global stock markets and concerns over the financial health of banks, sources said. .
Founded in 2016 by husband and wife team Varun and Ghazal Alagh, Mamaearth capitalizes on India’s booming beauty and personal care market, which is expected to reach $30 billion by 2026 and is growing at a 12% annual rate. Mamaearth was last valued at $1.2 billion in January 2022.
Mamaearth planned to start marketing the IPO and begin initial discussions with investors by the end of January, but that hasn’t happened yet, the sources said. During preliminary informal reviews with investors, there was a difference between the valuation the company was aiming for and what investors were willing to give, one of the sources said.
The company has until December to receive IPO approval from the Securities and Exchange Board of India (SEBI) and to file its final prospectus. It is still planned to list the list but with a delay, the sources said. It could reassess market conditions and begin its marketing process by October if sentiment improves, they said.
Mamaearth chief executive Varun Alagh was not specific about the halt to the IPO, but said the company “won’t optimize for short-term valuations, we’re in it for the long-term.”
Alagh said Mamaearth is working with SEBI on approval and will consult with bankers thereafter.
He added that its largest investor, Sequoia, would not sell any shares in the IPO, and the founders would own more than 97% of their shares after the IPO.
Last month, Indian clothing retailer Fabindia, backed by billionaire Azim Premji’s fund, and jewelry retailer Joyallukkas canceled their IPOs due to poor market conditions.
reporting by M. Sriram; Edited by Christian Schmollinger
Our standards: The Thomson Reuters Trust Principles.
Comments are closed.