Mamaearth on Monday sought to deny reports of withdrawal of its proposed Rs 2,500-crore IPO, saying that the parent company Honasa Consumer is engaging with regulator SEBI on the public issue. Earlier today, Reuters reported citing sources that Mamaearth has put its proposed IPO on hold due to weak market conditions. Mamaearth co-founder and CEO Varun Alagh told CNBC TV18 in an interview that the company is replying to SEBI queries, and expects to get approval on IPO prospectus by next month.
“The reports are largely baseless. We are still in the process and are engaging with the banks and more importantly, the regulator and are awaiting approval on the draft prospectus that we have filed,” Varun Alagh told CNBC TV18. He further added that after the approval from SEBI, the company will have 12 months to file for RHP and go ahead.
Asked if the IPO size will change in any way, Varun Alagh said that there will be no changes in the IPO size. “Given the largest investor in the company is not selling a single share, even promoters are retaining 97 per cent of the share, I don’t see much changes happening,” he said. Honasa Consumer is looking to raise Rs 400 crore through fresh issue of shares, apart from an offer for sale (OFS) of around 4.7 crore shares, according to the DRHP documents.
Mamaearth plans to start marketing the IPO and begin initial talks with investors by the end of January. According to the Reuters report, in preliminary informal checks with investors, there was a difference in the valuation that the company was seeking and what investors were willing to give. However, Varun Alagh maintained that the company had never shared those numbers and the company is still some time away from finalising valuations.
Earlier, Honasa Consumer had said that it plans to utilise its IPO proceeds of Rs 2,900 crore on marketing initiatives and expanding its offline reach across key brands. The proceeds will be for advertisement expenses towards enhancing the awareness and visibility of its brands, capital expenditure for setting up new exclusive brand outlets (EBOs), investment in company’s subsidiary BBlunt (Bhabani Blunt Hairdressing) for setting up new salons, and general corporate purposes and unidentified inorganic acquisition, it had said.