How to read Mamaearth

Why read this story?

Editor's note: Here’s what everyone’s asking. Is Mamaearth going to be another Paytm? For those who haven’t followed Vijay Shekhar Sharma’s ruinous 2022, Paytm lost 70% of its value after going public. It doesn’t help that Mamaearth has decided to test the public markets at a time when internet companies or anything that’s even remotely associated with the startup ecosystem is being looked at with suspicion. While the company hasn’t indicated a target valuation in its draft IPO papers, filed last week, rumours abound that it may look at something in the ballpark of $3 billion.  Until the company gets clearance from the capital markets regulator and finalizes its IPO prospectus, there’s no certainty as to how it will price its shares in the public offer. For now, we try to cut through the noise and put into perspective Mamaearth’s business model and its surprising decision to tap the public markets for funds, given its slim profits and the sentiment against startup IPOs. First, the basics. Incorporated as Honasa Consumer Pvt. Ltd, Mamaearth is a beauty and personal care company. Founded in …