Fireside Ventures Investment Fund, a prominent venture capital entity, is gearing up to divest a 1.9% stake in Honasa Consumer, the parent company of the popular personal care brand Mamaearth. The divestment will be executed through block deals scheduled for Tuesday, as reported by CNBC Awaaz.
The venture capital firm is offering 61 lakh shares, representing a 1.9% stake in Honasa Consumer, with an estimated value of ₹230 crore. The designated floor price for this sale has been set in the range of ₹368.7-384.1 per share, indicating a potential discount of up to 4% from the prevailing market price. Kotak Securities has been enlisted as the broker for facilitating the deal, according to the reports.
The share price of Honasa Consumer experienced a 3.85% decline, closing at ₹384.80 per share on Monday, compared to the previous closing price of ₹400 on Friday last week.
Since its debut on the Indian stock market on November 7, Honasa stock has witnessed notable volatility. Initially priced at ₹324 during its initial public offering (IPO), it debuted at a 2% premium, reaching ₹330 and hitting a high of ₹340.45 on an intraday basis. However, the initial enthusiasm waned, leading to a swift decline to as low as ₹256 on the BSE within two days.
The stock successfully rebounded from this downturn after receiving a positive endorsement from Jefferies India. The brokerage initiated coverage on the stock with a “buy” rating and set a price target of ₹520. Jefferies envisions Honasa Consumer achieving industry-leading growth, projecting a 27% increase over the next three years.
In the previous month, the company disclosed its financial results for the September quarter, unveiling a year-on-year revenue surge of 5.5% and a profit growth exceeding 13%. The consolidated net profit for the second quarter, ending September 30, 2023, witnessed an impressive 93.4% year-on-year jump, reaching ₹29.4 crore.
As Fireside Ventures proceeds with the divestment, the market will be keenly watching the outcomes of the block deals and the subsequent impact on Honasa Consumer’s stock performance. The divestment comes at a time when the company has demonstrated resilience and positive financial indicators, attracting interest from both investors and analysts alike.
