With Mamaearth facing flak on social media and financial experts alike for its supposedly inflated valuations ahead of its IPO, the FMCG company’s founders issued a clarification on Wednesday through a Twitter thread.
“Sharing a thread to throw some clarity on all the noise around valuations around our prospective IPO,” co-founder Ghazal Alagh started her Twitter thread.
“In our DRHP as is the standard practice there is no mention of valuation. Valuation discovery is a process which will take place over time as we get into deeper conversations with investor community. We have not quoted or subscribe to the valuation numbers which are getting mentioned in various posts on social media. We have built this company and our brands with a lot of love, the same way we have raised our children,” tweeted Alagh at a time when Twitter users slammed the company for three times increase in valuation at $3 billion within 12 months.
The Alagh couple likened Mamaearth to their ‘children’ and said they will never leave the “company for times to come”, which can be construed as an assurance from them at a time when a number of early stage investors are making an exit through the IPO.
“The way 1 never leaves the side of their children we firmly stand behind building our brands and this company for times to come. We started Mamaearth with the purpose of providing toxin free products for babies since we ourselves could not find the right products for our baby. God has been kind, luck favored us, consumers loved us and our team has put in crazy efforts to take it to a level where we are today with 6 amazing brands serving millions of Indian consumers,” tweeted Alagh.
Last week, Honasa Consumer Ltd, which owns new-age FMCG brands like Mamaearth and The Derma Co, has filed preliminary papers with capital markets regulator Sebi to raise funds through an initial public offering (IPO).
The IPO comprises a fresh issue of equity shares worth Rs 400 crore and an offer-for-sale (OFS) component of 4,68,19,635 equity shares by promoters, investors and other selling shareholders, according to the draft red herring prospectus (DRHP).
Those offering shares in the OFS include promoters — Varun Alagh and Ghazal Alagh — and investors like Fireside Ventures Fund, Sofina, Stellaris, Kunal Bahl and Rohit Bansal, Rishabh Harsh Mariwala of FMCG firm Marico and Bollywood actor Shilpa Shetty Kundra. Kotak Mahindra Capital Company, Citigroup Global Markets India, JM Financial and JP Morgan India Pvt Ltd are the book-running lead managers to the issue.
“Even in the eye of the storm we will keep working hard, innovating and building a business that our next generations can be proud of,” tweeted Alagh.
Ghazal Alagh’s husband and Mamaearth co-founder Varun Alagh posted a similar post on LinkedIn.