IPO withdrawal rumors are 'unfounded' and 'baseless': Mamaearth's CEO
Indian skincare company Mamaearth has dismissed rumors about its IPO withdrawal. Varun Alagh, the company's CEO, called the reports claiming Mamaearth's decision to postpone its IPO "baseless" and "unfounded." The company plans to raise between $200 million and $300 million through the issuance of shares. Today, reports said Mamaearth's parent Honasa Consumer Ltd. decided to delay the IPO due to unfavorable market conditions.
Why does this story matter?
- The primary market has been in poor shape for a while, even before Adani Group decided to cancel its massive follow-on public offer (FPO).
- Tough macroeconomic conditions and recession fears have made it a challenge to go through with IPOs. Several Indian companies, including Joyalukkas and Fab India, withdrew their IPO, citing weaker market conditions.
Mamaearth expects approval for DRHP by next month
Alagh told CNBC-TV18 that Mamaearth plans to go ahead with its IPO. The company's parent filed IPO documents in December 2022. After filing the draft red herring prospectus (DRHP), the company has been conversing with regulators and bankers. It expects the Securities and Exchange Board of India's (SEBI) approval for its DRHP by next month.
The company's estimated value is up to $3 billion
Mamaearth's rapid growth over the last few years is what led to the IPO. Speaking about the market, Alagh said beauty and personalization is a mature market. The company's estimated value is up to $3 billion. However, Alagh said the company has never shared any valuation number. He added that the firm expects "significant interest" for the IPO.
SEBI's queries are part of the regulation process: CEO
SEBI's queries to Mamaearth about the share issue have raised questions about the IPO. About this, Alagh said, "queries are a part of the regulation process." "We are not worried about it," he said. He added that there had been no change in the size of the offering. According to Alagh, early feedback from investors about the IPO has been positive.
Mamaearth's IPO has been highly anticipated
Once the company receives the approval for its DRHP, it will have 12 months to file the IPO. The Sequoia Capital-backed company was founded in 2016 by Varun and Ghazal Alagh. It has been one of India's fastest-growing personal care brands. Its rise in recent years has made the IPO a much anticipated one. It seems the company is going ahead with its plan.
