Shares of Honasa Consumer Ltd, the parent company of direct-to-consumer brands Mamaearth and The Derma Co, are currently in the red. This decline follows a substantial block deal that transpired shortly after the market opened on Tuesday (December 5th).
Around 2% stake of the company, or 62.90 lakh shares, changed hands in the block deal, valued at INR 238 crore.
Nevertheless, the identities of the buyers and sellers involved in the transactions remain undisclosed.
By 11:20 am, the shares were being traded at INR 379 each on the BSE, reflecting a 1% decrease from the previous closing price of INR 383.
Previously, there were reports indicating that Fireside Ventures, a venture capital firm, intended to sell a 1.9% stake in Honasa Consumer through various block deals. The venture capital firm aimed to divest 61 lakh shares at a price range of INR 368.7 to INR 384.1 per share.
Read More: Fireside Ventures to Divest 1.9% Stake in Honasa Consumer’s Mamaearth
The decision to divest the stake aligns with recent reports indicating that Honasa had accumulated excess stock with its offline distributors ahead of the startup’s public listing.
As per the reports, distributors in Maharashtra and Goa are currently grappling with a 90-day inventory burden, marking a substantial rise from the usual 30-day stock levels.
Mamaearth, the D2C unicorn, entered the Indian stock exchange on November 7, debuting on the NSE with an almost 2% premium. The shares were introduced at INR 330, reflecting a listing gain of INR 6 compared to the issue price of INR 324. Meanwhile, on the BSE, Mamaearth shares opened flat at INR 324.
Read More: Mamaearth marks its entry on NSE with nearly 2% premium debut
Despite a promising beginning, the initial enthusiasm was tempered by market volatility, leading the stock to drop to a historic low of INR 256.10 on the BSE just four days later. Nevertheless, a positive turn of events ensued when the company unveiled its Q2 FY24 results, showcasing a significant rise in net profits.
In Q2, Mamaearth reported a Profit After Tax (PAT) of INR 29.4 Cr, marking a nearly 94% year-on-year (YoY) surge, and its operating revenue also saw a 21% rise to INR 496.1 Cr.
On November 23, shares of Honasa Consumer Ltd surged by 20% during intraday trading, reaching the upper limit and achieving a record high at INR 422.5 on the BSE, spurred by the company’s Q2 FY24 earnings announcement.
