Mamaearth’s IPO value raises concerns
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The proposed IPO valuation of Honasa Consumer — the parent company of FMCG brand Mamaearth — has got industry experts and investors talking, reports Financial Express. With a net profit of ₹14 crore at the end of FY22, the company reportedly filed a Draft Red Herring Prospectus totalling ₹2,900 crores with SEBI on December 29. Apart from a valuation that is more than 1,000 times its profits, other concerns investors have are excessive advertising spending and erratic profit margins, the report says. Several prominent recent IPOs, like those of Zomato and Paytm, have failed to hold on to their high valuations and many speculate that Mamaearth might follow suit. The company is seeking a valuation target of $3 billion through its IPO, the report adds.
Mamaearth co-founder Ghazal Alagh, however, denied all claims about the valuation in a LinkedIn post.