MamaEarth, a direct-to-consumer (D2C) skincare and cosmetics brand, reportedly postponed its planned IPO because of the challenging market. With this, the Sequoia-backed business would follow in the footsteps of companies like Snapdeal, MobiKwik, PharmEasy, Droom, OYO, and boAt, who have delayed their intentions to undertake an initial public offering (IPO) despite filing their Draft Red Herring Prospectus (DRHP) with SEBI.
The firm has been forced to put the listing proposal on hold, according to a Reuters report, due to valuation disagreements between the company and possible investors and unfavourable market circumstances.
“…we are still engaging with Sebi on our DRHP and awaiting formal approval for the same. 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,” said MamaEarth as per reports.
In order to generate money through an IPO, Honasa Consumer Ltd, the company that owns D2C brands like MamaEarth, The Derma Co, and BBlunt, filed their DRHP with SEBI on December 29. In addition to being the first unicorn of 2022, the business was also one of the few firms to submit a DRHP after turning a profit.
Clarifying its stance on difference overvaluation, the company said, “…As you are aware pricing and valuations will be discovered as part of our marketing roadshows as we start them”.
In FY22, MamaEarth had a two-fold increase in revenue, reaching Rs 943 crore, but a 50% fall in profit, to Rs 14.4 crore. In addition, the business reported operational income of Rs 722 crore for the first half of FY23 (H1 FY23), according to DRHP documents submitted to SEBI. The corporation is probably going to exceed FY22 sales statistics in the current fiscal year if things continue this way.
