D2C beauty ecommerce unicorn Mamaearth has reportedly put its initial public offering (IPO) on hold due to weak market conditions. Mamaearth is said to be in a “wait and watch mode” as the global stock market has been affected by persisting volatility and the recent banking crisis in the US and Europe. The startup was reportedly aiming to raise $200 million to $300 million through the public offer. Mamaearth clarified in a statement that it is still engaging with SEBI on its DRHP and is awaiting formal approval for the same, adding that pricing and valuations will be discovered as part of marketing roadshows and that the company is not focused on short-term valuations.
It appears that Mamaearth is facing challenges in terms of finding a suitable valuation for its IPO, as investors are not willing to give the valuation that the company is seeking. Despite this, the company has clarified that it is still engaging with SEBI on its DRHP and awaiting formal approval. Mamaearth, which started as a D2C brand selling baby care products, has now expanded its product line to include personal care, makeup, haircare, and beauty products, and delivers to over 500 cities in India. The startup’s parent company, Honasa Consumer Limited, had filed its DRHP with SEBI in December 2020, with plans to raise $200 Mn-$300 Mn through the public offer.
The latest trend of startups putting their IPO plans on hold or withdrawing their DRHP can be attributed to the macroeconomic volatility and the funding winter. Some of the startups that have shelved their IPO plans or withdrawn their DRHP include Snapdeal, Droom, PharmEasy, MobiKwik, and OYO. Mamaearth, which was looking to raise $200 Mn-$300 Mn through the public offer, has reportedly put its IPO on hold due to weak market conditions and is currently in a “wait and watch mode”. Mamaearth’s last private valuation was around $1.3 Bn, and the company turned profitable in FY22, posting a standalone net profit of INR 19.8 Cr.