MamaEarth plans new-age IPO in focus

New-age companies going for public listing have failed to inspire in the recent past. So when Honasa Consumer Pvt. Ltd., parent of skincare brand Mamaearth filed its draft papers on December 29, potential investors got worried. The company didn’t quote a valuation figure, but based on an earlier Reuters report, social media users put two and two together to conclude that Mamaearth enjoys a sharp valuation-or, price-to-earnings (PR) ratio. P/E) ratio. More than 1,600 times its last financial year’s profit. (The company proposes a fresh issue of equity shares 400 crore and offer for sale of up to 46.8 million shares.) In the limelight again are the new age IPOs which are considered risky because of the uncertainty in their business. Experts say high valuations are justified if a company can chart a realistic path.