Up To 101X Returns: Early Investors Kunal Bahl, Shilpa Shetty Set For Mamaearth IPO Windfall

SUMMARY

At the upper end of the listing price, Snapdeal cofounders Rohit Bansal and Kunal Bahl will see returns of nearly 101X on their initial investment, raking in INR 38.27 Cr each

Actor Shilpa Shetty will offload 13.93 Lakh shares for a cumulative sum of INR 39.3 Cr at the upper price limit, witnessing a return of 7.7X

The biggest individual winner is slated to Marico’s Rishabh Mariwala who is expected to see a windfall of up to INR 181.23 Cr at peak listing price, a return of more than 53X

As markets wait with bated breath for D2C unicorn Mamaearth’s IPO listing, it looks like the debut will surely create some winners.

The IPO is expected to bring in heavy windfall for some of Mamearth’s earliest investors who are offloading their stake in the offer for sale component.

At the upper end of the listing price (INR 324), Snapdeal cofounders Rohit Bansal and Kunal Bahl will see returns of nearly 101X on their initial investment while actor Shilpa Shetty will rake in returns to the tune of 7.74X.

While both Bansal and Bahl acquired equity stake in Mamaearth at an average price of INR 3.21 per share in August 2017, the duo will earn INR 38.27 Cr each at the ceiling price. They will still be left with 11.93 Lakh shares each which translates to INR 38.66 Cr each.

Actor Shilpa Shetty, who first invested in the startup in 2018, will offload 13.93 Lakh shares for a cumulative sum of INR 39.3 Cr at the upper price limit. Post the sale, she will still own 2.3 Lakh shares in the company valued at around INR 7.46 Cr. As per the startup’s RHP, Shetty Kundra picked up stakes in the company at a price of INR 41.86 per share.

The biggest winner among angel investors participating in Mamaearths OFS segment appears to be FMCG giant Marico scion Rishabh Mariwala. He is expected to see a windfall of INR 181.23 Cr at peak listing price, a return of more than 53X against an initial investment of INR 6.05 per share. After the sale, he will still have 34.2 Lakh shares cumulatively pegged at INR 110.81 Cr.

Institutional investors participating in the OFS component also expected to make big gains as Mamearth lists on the bourses on Tuesday (November 7).

Early investors Fireside Ventures and Stellaris are expected to rake in INR 252.46 Cr and INR 345.98 Cr respectively at the upper end of the price band. Another major investor Sofina will see a windfall of INR 202.75 Cr through the IPO proceedings.

No stakeholders participating in the IPO sale will completely divest their stake.

For Mamaearth cofounders Varun and Ghazal Alagh, the IPO listing will translate into proceeds worth INR 103.2 Cr and INR 3.24 Cr respectively.

A day earlier, it was reported that investor Peak XV Partners, formerly Sequoia Capital India, was sitting on 10X-plus returns on account of Mamaearth’s listing on the bourses.

This comes days after the D2C unicorn’s public issue was oversubscribed 7.61X on the final day of its public issue on the back of heavy interest from qualified institutional buyers (QIBs). The IPO received bids for 22 Cr shares as against 2.89 Cr shares on offer.

Mamaearth plans to raise up to INR 1,700 Cr via its IPO at a valuation of $1.2 Bn. The public issue comprised a fresh issue of shares worth INR 365 Cr and an offer for sale (OFS) component of 4.12 Cr shares. The company has set the price band in the range INR 308-INR 324 per share.

The husband-wife duo founded the company in 2016 and since then the company has scaled up to own multiple brands under the parent company Honasa Consumer. The startup owns four beauty and personal care brands – The Derma Co., Ayuga, Aqualogica and Dr Sheth’s.

The D2C unicorn saw its net losses zoom to INR 151 Cr in FY23 on account of a one-time loss. While many have criticised the hefty valuation sought by the company and high OFS portion of the IPO, it remains to be how markets react as the company opens its accounts on the bourses.