Mamaearth's IPO Plans in Limbo as Startup Awaits SEBI Approval for DRHP

According to sources familiar with the matter, D2C beauty e-commerce unicorn Mamaearth has decided to put its initial public offering (IPO) on hold due to weak market conditions. Mamaearth is currently in a "wait and watch mode," given the persisting volatility in the global stock market, with the banking crisis over the last month in the US and Europe further exacerbating the market sentiment.

Mamaearth has stated that it is still engaging with SEBI regarding its DRHP and awaiting formal approval. The company clarified in a statement that after receiving approval, it will have 12 months to file RHP and take the company public, which it will do in consultation with its bankers, as per regulations.

As per the Reuters report, Mamaearth was looking to raise $200 Mn-$300 Mn through the public offer.

Mamaearth emphasized that pricing and valuations would be determined during marketing roadshows and stated that short-term valuations were not their main focus. The company also announced that its largest investor would not sell any shares in the company, and the promoters would still retain over 97% of their stake after the IPO. The startup clarified that they were not optimizing for short-term valuations, as their priority is long-term growth.

In December of last year, Honasa Consumer Limited, the parent company of Mamaearth, filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). According to the DRHP, the IPO would include an offer for sale (OFS) of 46.82 Mn shares, as well as INR 400 Cr worth of fresh issue of shares. The draft papers indicate that the promoter group holds a 37.6% stake in the company, while Sequoia India is the second-largest shareholder with a 24.01% stake.