On Wednesday 4th January 2023, private care model Mamaearth’s co-founder took to Twitter to reply to rumours that the corporate’s proposed IPO is very overvalued. After Mamaearth proprietor Honasa Consumer filed the Draft Red Herring Prospectus (DRHP) to the market regulator Securities and Exchange Board of India (SEBI) for elevating capital by way of an IPO, it’s being speculated within the media that the IPO values the corporate at ₹24,000 crore. Following the stories, social media customers are claiming that it’s extremely overvalued.
However, Ghazal Alagh refuted the claims saying that the valuation determine is only speculative and the corporate has not launched any valuation quantity. She stated in her thread of tweets that there isn’t any point out of valuation within the Draft Red Herring Prospectus (DRHP) filed with the SEBI to lift round ₹2,900 crores by way of an preliminary public providing (IPO). She added that the valuation of the corporate might be found in the course of the technique of issuing the IPO, and it has not been decided but.
Ghazal Alagh wrote, “Sharing a thread to throw some clarity on all the noise around valuations around our prospective IPO. In our DRHP as is the standard practice there is no mention of valuation. Valuation discovery is a process which will take place over time as we get into deeper conversations with the investor community.”
In our DRHP as is the usual observe there isn’t any point out of valuation. Valuation discovery is a course of which can happen over time as we get into deeper conversations with investor neighborhood. (2/6)
— Ghazal Alagh (@GhazalAlagh) January 4, 2023
The Mamaearth co-founder additionally refuted allegations on social media that the founders are attempting to promote their stake by way of the IPO. She confused that the founders love the corporate similar to mother and father love their youngsters, saying that they’ll by no means go away the corporate.
She additional stated in her tweet, “We have not quoted or subscribed to the valuation numbers which are getting mentioned in various posts on social media. We have built this company and our brands with a lot of love, the same way we have raised our children. The way one never leaves the side of their children we firmly stand behind building our brands and this company for times to come. We started Mamaearth with the purpose of providing toxin-free products for babies since we ourselves could not find the right products for our babies.”
The manner 1 by no means leaves the aspect of their youngsters we firmly stand behind constructing our manufacturers and this firm for occasions to return. We began Mamaearth with the aim of offering toxin free merchandise for infants since we ourselves couldn’t discover the best merchandise for our child(4)
— Ghazal Alagh (@GhazalAlagh) January 4, 2023
Ghazal Alagh added, “God has been kind, luck favored us, consumers loved us and our team has put in crazy efforts to take it to a level where we are today with 6 amazing brands serving millions of Indian consumers. Even in the eye of the storm, we will keep working hard, innovating, and building a business that our next generations can be proud of.”
Even within the eye of the storm we’ll maintain working arduous, innovating and constructing a enterprise that our subsequent generations could be pleased with. (6/6)
— Ghazal Alagh (@GhazalAlagh) January 4, 2023
Twitter customers criticized the valuation of Mamaearth
On December 29, Honasa Consumer, the father or mother firm of Mamaearth, filed Draft Red Herring Prospectus (DRHP). In its Draft Red Herring Prospectus, Mamaearth stated it’s planning to lift as a lot as Rs 2,400 crore by way of its IPO. It expects to lift about Rs 400 crore by way of a contemporary concern of shares and the remaining by way of an Offer For Sale (OFS) of about 4.7 crore shares.
At the top of FY22, Mamaearth posted a internet revenue of Rs 14.4 crores and revenues of Rs 943 crores. With speculations abounding that the group is a $3 billion market capitalization (Rs 24,000 crores), the group’s price-to-earnings ratio can be about 1,666x, elevating warning amongst traders and market consultants, who assert that the valuation of the model is exorbitant.
Several social media customers raised the alarm over Mamaearth IPO and exercised retail traders to train warning over making use of for the Initial Public Offering in an already risky market, particularly after their disagreeable expertise with Zomato and PayTM shares, which have had related over-valuation considerations.
