?? The unicorn IPO conundrum

Cashing out during an initial public offering won’t be easy for venture-capital investors or promoters of India’s unicorns. At least nowhere close to what it was in 2021.

This past week, we reported on how direct-to-consumer brand Mamaearth, a profitable business, is exploring options to reduce the secondary sale component of its IPO. It will be tricky to alter the terms, given that market regulator Sebi has already signed off on the IPO document.

This may be a new reality for the insiders of market-bound startups: they must wait for a couple of years after the listing to get their money’s worth.

All unicorn stocks, barring Nykaa, have had a good run this year. Zomato is up 65%, Policybazaar 77%, Delhivery 32% and Paytm 70%.

Nykaa, which is down 6%, had the biggest offer-for-sale component among these companies.

Other factors are at play for each of these stocks, but entrepreneurs moving towards an IPO want to avoid the perception that they are profiting from the pain of retail investors.?

Madhav Chanchani

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Mamaearth targets November IPO, begins roadshows

Arc Notes

• Honasa, the parent firm of omnichannel consumer brand #Mamaearth, is preparing to hit the public markets in November, say people aware of the plans. It has begun roadshows before investors.
• After closing the July-September quarter, the company intends to update the first-half results and submit the red herring prospectus by mid-October, as per a source.
• While there is no official confirmation, the valuation of the IPO under discussion is between Rs 12,000 crore ($1.4 billion) and Rs 14,000 crore ($1.6 billion), say three people familiar with issue details. Last year, Honasa had faced a blowback over its reported target valuation of $3 billion.?

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