Honasa Consumer, Mamaearth’s parent company, witnessed a significant decline in its share price, hitting an all-time low of INR 237.40 on November 21.
Honasa’s market cap shrinks to $0.91 bn
The company’s market cap also shrunk to $0.91 billion from $1.42 billion at the end of last week, causing it to fall below the unicorn valuation mark.
Continue Exploring: Mamaearth’s parent company Honasa registers loss of INR 18.57 Cr, revenue declines 6.9%
Meanwhile, the decline in share price comes amid a row with distributors. The All India Consumer Products Distributors Federation (AICPDF) alleged that Honasa was undertaking unethical stock dumping practices. The body claimed that while they continue to deal with issues pertaining to “unsold stocks nearing expiry” of Honasa, the company’s credit notes of about INR 50 crore are unsettled.
Following which, AICPDF’s national president Dhairyashil Patil said, “If the issues are not resolved, the body will be forced to explore a nationwide decision of non-cooperation.” However, Honasa strongly denied the allegations in its response to AICPDF shared with the bourses.
Continue Exploring: Mamaearth’s Honasa Consumer faces AICPDF heat over unsold inventory worth INR 300 Cr
Honasa refutes allegations of AICPDF
In its detailed response, Honasa countered a large chunk of the allegations made by the body. The company sighted data from its Distribution Management System to show that the distributor network currently carried an inventory worth INR 40.69 crore of its products. Honasa also countered AICPDF’s allegation of INR 50 crore of unsettled credit notes by saying that the claims for its general trade channel partners stood at INR 4.73 crore as on September 30, 2024.
Further the company stated, “Given these efforts, the claims made are not reflective of the current reality, and are spreading misinformation about us.” The company’s share prices have been on a freefall since it disclosed its financials for the second quarter of the fiscal year 2024-25. The company slipped into the red and posted a consolidated net loss of INR 18.6 crore during the quarter.
