Established in 2016, Mamaearth has become popular in India with its “toxin-free” products such as face washes, shampoos and hair oils. combat it UnileverIndia unit of
And & Gamble Company is in the fast growing personal care industry.
The company was valued at $1.2 billion in January this year when it raised fresh funds from investors including Sequoia and Belgium’s Sofina.
A person briefed on the discussion said MamaEarth is targeting a valuation of about $3 billion — 10-12 times forward earnings, based on sales growth and future revenue potential. It plans to file draft regulatory papers by the end of this year, said sources, who declined to name the scheme private.
Two of those sources said MamaEarth is in early-stage discussions to raise at least $300 million in its IPO, with a third source pegged at $350 million.
A MamaEarth spokesperson declined to comment on its IPO plans. The company’s target valuation for the IPO, and the funds it will raise, has not been previously reported.
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Sources said the company is in talks with JP Morgan Chase, Indias and Capital to be appointed as bookrunners for the deal.
JPMorgan Chase declined to comment. JM Financial and Kotak Did not immediately respond to requests for comment.
Mamaearth’s IPO plans come at a time of broad passage into capital markets and a slowdown in India’s fast-growing startup ecosystem, which raked in a record $35 billion in fundraising last year. Now, some startups are cutting back on staff and finding it difficult to raise funds, Reuters has reported.
was co-founded by Mamaearth Varun Alaghi, a former executive of Hindustan Unilever and his wife Ghazal. With brands backed by popular Bollywood celebrities, the duo has capitalized on the e-commerce adoption in India by offering their products on platforms such as the platform. heroine and Walmart’s Flipkart.
Indian financial services firm Avendus estimates that India’s beauty and personal care industry is expected to grow from $17.8 billion in 2020 to $27.5 billion by 2025. It added that the number of online buyers of beauty products is also projected to increase from 25 million to 135 million during that period. However, an Equity Research analyst said the success of Mamaearth’s IPO depends on how it plans to rapidly expand into offline sales. Most Indians still go shopping in retail outlets, with e-commerce accounting for only 5-6% of the spend.
CEO Alagh told Business Standard newspaper in January that 70% of Mamaearth’s sales come from online platforms, but it was targeting a larger offline presence and reaching 40,000 retail stores in 100 cities this year.
For the fiscal year ended March 2022, MamaEarth’s parent, Honsa Consumer Pvt Ltd, reported revenue of $130 million with a small profit, one of three sources said.
The company reported a profit after tax of 246 million Indian rupees ($3.15 million) for the year ended March 2021.