Ashneer Grover applies in Mamaearth IPO, says they shut down critics in style: 'Kudos'

Ashneer Grover also congratulated Mamaearth founders Varun and Ghazal Alagh.

Ashnner Grover on Thursday congratulated Mamaearth and its founders Varun and Ghazal Alagh after it subscribed 7.59 times on November 2, the final day of bidding, receiving bids for 21.92 crore shares against the issue size of 2.89 crore shares. The price band for the offer, which opened on October 31, has been fixed at Rs 308-324 per share.

The entrepreneur and former Shark Tank India judge also revealed that he applied for the company's IPO (initial public offering) "quietly and handsomely" without revealing the exact amount.

"Congrats, Mamaearth, Varun Alagh, and Ghazal Alagh for IPO getting over-subscribed 8X!! And for proving all twitter IPO pundits/valuation experts wrong and shutting them up in style. Kudos!" Ashneer Grover wrote on X, formerly Twitter. "Disclaimer - I applied in IPO quietly and handsomely - Twitter pe diss karne se paise nahi bante - IPO subscribe karne se fir bhi ban sakte hai (Dissing them on Twitter won't make you money, subscribing to their IPO probably can)!"

Congrats @mamaearthindia @VarunAlagh @GhazalAlagh for IPO getting over-subscribed 8X !! And for proving all twitter IPO pundits / valuation experts wrong and shutting them up in style. Kudos !

Disclaimer - I applied in IPO quietly and handsomely - twitter pe diss karne se paise… pic.twitter.com/l4QfXrFw4K

— Ashneer Grover (@Ashneer_Grover) November 2, 2023

Grover was referring to the speculation among many experts that Mamaearth IPO was an empty vessel making loud noise. The cynicism probably arose from the chatter that Mamaearth first won customers’ trust with products, then approached the public to raise money.

The seven-year-old company had started as toxin-free products for babies has evolved into a house of six brands today. But, customer loyalty has been hard to come by. Several of its products, especially the onion hair growth oil, has been the butt of jokes on social media for not producing any results.

This is why Mamaearth has to spend on ads to acquire new customers. It spends anywhere between 30-40 percent of its sales on advertising, much higher than traditional consumer companies. Moreover, the company has been planning to spend Rs 182 crore from the IPO proceeds on advertising expenses and brand visibility, which experts said would be unsustainable beyond a point.

Read more: Ashneer Grover on Narayana Murthy’s 70-hour work week advice: ‘junta got offended because…’