Responding to social media users who had expressed concerns regarding the Sequoia- and Sofina-backed company’s valuation demand, Alagh said, “In our DRHP as is the standard practice there is no mention of valuation.”

“We have not quoted or subscribe to the valuation numbers which are getting mentioned in various posts on social media,” the co-founder of the personal care products startup wrote in a a series of tweets.

Explaining further, Alagh said, “Valuation discovery is a process which will take place over time as we get into deeper conversations with investor community.”

Netizens have raised valuation concerns ever since Honasa Consumer Ltd, which owns new-age FMCG brands like Mamaearth and The Derma Co, filed papers with capital markets regulator Sebi to raise funds through an IPO.

‘Disastrous’, ‘extortion’ – were some of the words that have been used on Twitter to describe the valuation demand. Several investors have also taken to social media platforms to say that they will keep away from the IPO.

The IPO comprises a fresh issue of equity shares worth ₹400 crore and an offer-for-sale (OFS) component of 4,68,19,635 equity shares by promoters, investors and other selling shareholders, according to the draft red herring prospectus (DRHP).

Those offering shares in the offer for sale include promoters – Varun Alagh and Ghazal Alagh – and investors such as Fireside Ventures Fund, Sofina, Stellaris, Kunal Bansal and Rohit Bansal, Rishabh Harsh Mariwala of FMCG firm Marico and Bollywood actor Shilpa Shetty Kundra.

The offer also includes a reservation of up to ₹10 crore for subscriptions by eligible employees.

The company was last valued at $1.2 billion in January last year when it raised $52 million from investors, including US-based Sequoia and Belgium’s Sofina.

In January 2022, the company entered the unicorn club. The startup had reported a consolidated restated profit of ₹15.72 crore in the year ended 31 March, 2022, its financial statement showed.

Earlier in June, Reuters had reported that Mamaearth was in talks to raise at least $300 million for the IPO scheduled for this year.

Honasa said it would use about ₹186 crore from the IPO for advertising expenses.

Kotak Mahindra Capital, Citigroup Global Markets India, JM Financial Ltd, and JP Morgan India Private Ltd are the book-running lead managers for the issue.

The equity shares of the company will be listed on the BSE and NSE.

Mamaearth was co-founded as a direct-to-consumer brand by Varun Alagh, a former Hindustan Unilever executive, and his wife Ghazal.