Honasa Consumer shares slide 6% amid block deal; Peak XV Partners, Sequoia Capital likely sellers

Shares of Mamaearth parent Honasa Consumer tumbled 6% in early trade on Thursday amid strong volume, with more than 22 lakh shares changing hands over the counter on the BSE as compared to two-week average of 0.85 lakh stocks. The turnover in terms of value was around ₹110 crore.

The sell-off in Honasa Consumer, that owns cosmetic brands such as The Derma Co and BBlunt, was triggered amid large block deals, with Peak XV Partners and Sequoia Capital among likely sellers. The names of buyers and sellers were not known immediately, but reports suggest that Peak XV Partners, Sequoia Capital, Redwood Trust, Fireside Ventures, Stellaris Ventures, and Sofina Ventures were mulling stake sale in the FMCG company.

As per the latest shareholding pattern available on the BSE, six foreign companies, including Sequoia Capital and Peak XV Partners, held 29.53% stake in the baby, skin, body, and hair care products manufacturer. Of this, Peak XV Partners owned 18.69% shares in the company, while Sequoia Capital held 4.35% stake in the company as of June 30, 2024.

On Thursday, Mamaearth shares opened lower at ₹500.10, down 4.2% against the previous closing price of ₹522 on the BSE. Extending opening losses, the FMCG stock declined as much as 6.1% to ₹490.15, while the market capitalisation slipped below ₹16,000 crore.

Earlier this week, Mamaearth shares touched its 52-week high of ₹546.50 on Tuesday, with the share price more than doubling from ₹256.10 on November 10, 2023.

Last month, Honasa Consumer received an order from the National Company Law Tribunal (NCLT), Chandigarh, for the scheme of amalgamation between Just4Kids Services, Fusion Cosmeceutics, and Honasa Consumer. On April 19, 2024, Honasa Consumer's board had approved the scheme of amalgamation between these two entities.

Just4Kids Services offers a platform to access information about the city's playschools and schools, hobby and sports classes, events, summer camps, and workshops for kids in Delhi, Gurgaon, Noida, Faridabad, and Ghaziabad. On the other hand, Fusion Cosmeceutics is primarily engaged in the formulation and trading of skincare products. 

For the first quarter ended June 30, 2024, Mamaearth parent Honasa Consumer reported a 63% jump in its consolidated net profit at ₹40 crore as compared to ₹24 crore in the corresponding quarter of the last financial year. The revenue from operations for the April-June quarter stood at ₹554 crore, up 19% over ₹464 crore posted in the year-ago period.

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