IPO-bound Mamaearth's promoters Varun & Ghazal Alagh will continue to hold 97% stake

Initial Public Offering (IPO) plans of Honasa Consumer Limited may have been put on hold for now but co-founders Varun and Ghazal Alagh are in this game for a “long-term” and they will continue to own 97 per cent stake in the company. 

In a statement, the company revealed, “As you are aware pricing and valuations will be discovered as part of our marketing roadshows as we start them. As discussed during our meeting neither is our largest investor selling a single share and also the promoters will continue to own over 97 per cent of their ownership in the company after the IPO hence we have no interest in optimizing for short term valuations, we are in this for the long term."

Citing weak market conditions as the reason, a report by Reuters revealed that Mamaearth has gone into a “wait and watch” mode.

Mamaearth filed its draft red herring prospectus with the market regulator SEBI in December last year. The company had proposed a fresh issue of equity shares aggregating up to Rs 400 crore and an offer for sale (OFS) of up to 46,819,635 shares.

The selling shareholders in the OFS would include actor Shilpa Shetty Kundra, Rohit Kumar Bansal, Sofina Ventures and Kunal Bahl, along with Varun and Ghazal itself.

Honasa is not not the only one facing uncertainty on the IPO front. Start-ups such as Droom, boAt, Pharmeasy, Snapdeal hit a pause button on their IPO plans due to the prevailing market conditions.

The last few months have seen financial health of the global market coming down amid scenarios such as layoffs, funding winter, Silicon Valley Bank (SVB) collapse unfolding one after another. The only start-up which is currently in the IPO race this year is travel tech start-up OYO. 

In January, OYO was asked by Sebi to refile the draft IPO (Initial Public Offering) papers with certain updates. In September 2021, OYO had filed preliminary documents with Sebi for a Rs 8,430-crore IPO. 
 

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