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My Favourite IPO MamaEarth is back.
Last time they wanted a Rs 24,000 cr valuation for having a profit of 24 cr.
This time around they have made a net loss of Rs 151 cr.
So they are being very very reasonable now.
They are only asking for a Valuation of Rs 10,500 cr.
Last time they wanted a Rs 24,000 cr valuation for having a profit of 24 cr.
This time around they have made a net loss of Rs 151 cr.
So they are being very very reasonable now.
They are only asking for a Valuation of Rs 10,500 cr.
Let's see what a Rs 10,500 cr company looks like, and compare it to MamaEarth.
Vardhman textiles Market cap is similar to what MamaEarth values itself
Their Annual Revenue is 10,317 cr.
MamaEarth is 1/10th of that.
Their net profit is Rs 764 cr
MamaEarth's made a loss
Vardhman textiles Market cap is similar to what MamaEarth values itself
Their Annual Revenue is 10,317 cr.
MamaEarth is 1/10th of that.
Their net profit is Rs 764 cr
MamaEarth's made a loss
Vardhman has reserves of Rs 3000 and Fixed assets of Rs 4000 cr.
MamaEarth outsources Its entire Manufacturing.
Vardhman's promoter owns 64%
MamaEarth promoter holding is 34%
And then there is this
MamaEarth outsources Its entire Manufacturing.
Vardhman's promoter owns 64%
MamaEarth promoter holding is 34%
And then there is this
The promoter's current stock holding is Rs 10 cr Shares
He is selling 3 cr shares in this IPO worth Rs 103 cr, Which is close to 30% of his stock holding
Then there is a question of sales
MamaEarth says they are a D2C company.
But they majorly sell thru Amazon and Flipkart
He is selling 3 cr shares in this IPO worth Rs 103 cr, Which is close to 30% of his stock holding
Then there is a question of sales
MamaEarth says they are a D2C company.
But they majorly sell thru Amazon and Flipkart
This means they will always have margin pressure and dependency.
Which is not good for a consumer brand.
And then there is the question of popularity of the brand.
For that you can do a small test.
Ask 6 people around you if they use MamaEarth products.
Which is not good for a consumer brand.
And then there is the question of popularity of the brand.
For that you can do a small test.
Ask 6 people around you if they use MamaEarth products.
The answer to that question is also the answer to the question on whether this is a genuine IPO or a PP Waterballs type cash grab IPO?
P:S: In 2020 MamaEarth was valued at Rs 2000 Cr.
What miracles Have they done that their valuation has quintupled in 3 years?
P:S: In 2020 MamaEarth was valued at Rs 2000 Cr.
What miracles Have they done that their valuation has quintupled in 3 years?
But if you look at it another way, Mamaearth sought a value of Rs 24000 cr when they planned an IPO at the beginning of 2023.
10 months later, they are seeking half that value
Now, What internal disaster has happened that they have cut their own value by half in that time?
10 months later, they are seeking half that value
Now, What internal disaster has happened that they have cut their own value by half in that time?
Now for the ultimate question
Ghazal Alagh Was on Shark Tank
If a company comes to her, with a 151 cr loss, heavily dependant on Amazon, with no manufacturing facilities and values itself at Rs 10,000 cr, will she invest?
Or say "I am out"?
Which is what we should also say.
Ghazal Alagh Was on Shark Tank
If a company comes to her, with a 151 cr loss, heavily dependant on Amazon, with no manufacturing facilities and values itself at Rs 10,000 cr, will she invest?
Or say "I am out"?
Which is what we should also say.
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