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Indian skincare startup Mamaearth has put its initial public offering (IPO) on hold because of weak market conditions, two people with direct knowledge of the matter said, a month after two other Indian companies also scrapped their share sales.

Mamaearth parent Honasa Consumer Ltd filed its documents for an IPO in December, planning to raise about $200 million to $300 million, through the issuing of new equity and an offer for sale of some existing shares, which could have valued the company at up to $3 billion.

Backed by investors such as Sequoia Capital and Belgium's Sofina, Mamaearth is now in a "wait and watch mode", the sources said, given the turbulence in stock markets globally amid worries about the financial health of banks.

Founded in 2016 by the husband and wife duo of Varun and Ghazal Alagh, Mamaearth has been betting on India's booming beauty and personal care market, which is estimated to expand to $30 billion by 2026 and has been growing by 12% a year, per the company's IPO papers. Mamaearth was last valued at $1.2 billion in January 2022.

Mamaearth planned to start marketing the IPO and begin initial talks with investors by the end of January, but that has not happened yet, the sources said. In preliminary informal checks with investors, there was a difference in the valuation that the company was seeking and what investors were willing to give, one of the sources said.

The company has until December to receive approval for the IPO from the Securities and Exchange Board of India (SEBI) and file its final prospectus. It still plans to list, but with a delay, the sources said. It may reevaluate market conditions and start its marketing process by October if the sentiment improves, they said.

Mamaearth Chief Executive Varun Alagh did not specifically comment on the IPO being put on hold but said the company would not be "optimising for short-term valuations, we are in this for the long term".

Alagh said Mamaearth was engaging with SEBI for approval and would consult with bankers after that.

He added that its largest investor, Sequoia, would not be selling any shares in the IPO and the founders would own more than 97% of their shares after the IPO.

Last month, Indian apparel retailer Fabindia, backed by billionaire Azim Premji's fund, and jewellery retailer Joyallukkas scrapped their IPOs due to poor market conditions.