Honasa Consumer is a parent company of Mamaearth that reported a 4.8% drop in its shares this  morning. The drop in shares came after the startup secured a major deal of Rs 291 crore.  Approximately 2 percent stake in the company changed hands in the transaction of Rs 66.2 lakh. The  average price of the block deal was Rs 439 each, with a 4% discount from previous stock and closing  at Rs 457.95 per share.  

Honasa Consumer is a digital-first beauty and personal care brand aiming to meet the various needs  of customers. CNBC-TV18 mentioned that Sofia Ventures and Fireside Ventures are more likely to be  the sellers involved in the transaction of the deal. These two firms were looking to sell around a 2  percent stake in Honasa Consumer through a block deal to raise Rs 273.2 crore. Fireside Ventures  Investment fund holds a 5.28% stake in the parent company of Mamaearth while Sofina Ventures owns  6.16 percent of the company’s stake. 

Image source: honasa.in 

Honasa consumer trading at Rs 440.20 on NSE while the block deal went down in volumes of the  counter. The company reported a net profit of Rs 30.47 crore in its fourth quarter of this financial year.  This was the highest-ever quarterly profit recorded by the company so far. Last year the company had a loss of Rs 161.85 crore for the same duration. The operational revenue for Honasa Consumer  increased by 21.5 percent to Rs 471.09 on a year-on-year basis in the same period.  

After seeing the fourth quarter result of Mamaerath’s parent company, brokerage ICICI Securities increased its earnings estimates. The Indian stock market previously crashed following the general  elections as the BSE Sensex declined by 5.80% followed by the NSE 50 tipping off by 6.22% because the BJP had to depend on allies to form a government this time. This stock market crash added to the  loss of Honasa Consumer Ltd.’s stake.  

Conclusion: 

The parent company of Mamaearth, Honasa Consumers reported a drop in shares of up to 4.8 percent. Approximately 2 percent stake in the company changed hands in the transaction of Rs 66.2 lakh. The drop in shares came just after the firm closed a major deal of Rs 291 crore. Sofia Ventures and Fireside  Ventures are more likely to be the sellers involved in the transaction of the deal. These two firms were  looking to sell around a 2 percent stake in Honasa Consumer through a block deal to raise Rs 273.2  crore. Sofina Ventures owns 6.16 percent of the company’s stake followed by Fireside Ventures  Investment Fund owning a 5.28% stake. Following the fourth quarter result of Mamaerath’s parent  company, brokerage ICICI Securitiesincreased its earnings estimatesfor the same. The decline in Indian  stock market shares also added to the loss of the startup’s shares. The average price of the block deal was Rs 439 each, with a 4% discount from previous stock and closing at Rs 457.95 per share.