Venture capital (VC) firm Fireside Ventures plans to offload 1.9% stake in Honasa Consumer, D2C unicorn Mamaearth’s parent, through multiple block deals on Tuesday (December 5).
As per CNBC Awaaz, the VC firm plans to dump 61 Lakh shares at a floor price of INR 368.7 to INR 384.1 apiece. At the upper limit, this translates into a cumulative sum of INR 234 Cr while, at the lower end of the spectrum, this implies a total of INR 224 Cr.
Kotak Securities has reportedly been assigned as the broker for the deal.
With this deal, Fireside could likely be looking to book profits amid a broader positive market sentiment. This comes as Mamaearth shares continue to be on a downward spiral, especially in the past five trading sessions.
The move to sell the stake also comes just days after reports surfaced that Honasa Consumer had overstocked its offline distributors ahead of the startup’s public listing. As per the report, excess stock has resulted in distributors across Maharashtra and Goa being saddled with inventory of 90 days against the usual 30 days.
The D2C unicorn listed on the bourses on November 7 at a premium of 2% on the BSE and slat INR 324 on the BSE. However, the initial enthusiasm was washed away by the market volatility, which led to the stock plummeting to a record low of INR 256.10 on the BSE just four days later.
The respite came as the company released its results for the quarter ended September 2023, which saw net profits nearly double (94% to be precise) to INR 29.4 Cr in Q2 FY24 compared to INR 15.2 Cr in the year-ago quarter.
Thereafter, the stock rallied, soaring to an intraday high of 20% on the day after releasing Q2 results.
What also helped was a positive endorsement from brokerage firm Jefferies, which commenced coverage on the stock within a BUY rating and set a target price of INR 520. The brokerage also estimated that Honasa Consumer was well-posed to achieve a growth of 27% over the next three years.
Curiously, this comes days after reports surfaced that employees of Honasa Consumer were planning to sell shares worth INR 150 Cr in a block deal last week. However, the company quickly shot down the reports saying that no such plan was on the anvil.
Honasa Consumer closed 4.04% lower at INR 383.50 on the BSE on Monday (December 4).
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