Mamaearth parent Honasa loses its unicorn status as shares plunge
The company's recent transition towards a direct distribution model along with a muted demand for its flagship brand has heightened investor fear.
Honasa Consumer, the parent company behind Mamaearth, has lost its unicorn status as shares fell about 29% across sessions since its close last week.
Shares closed at Rs 237.70 apiece tanking the company's total market cap to Rs 7,721 crore or roughly $902 million. It had filed for IPO at a valuation of Rs 10,500 crore in November 2023.
The company which listed on domestic bourses on November 7, 2023 is now trading about 27% below its IPO issue price of Rs 324.
In an exchange filing today, the company clarified the scope of its leftover inventory with distributors amid media reports of credit backlogs and unsold stock with distributors.
Honasa clarified that its distribution value chain carried a total inventory of Rs 40.69 crore, against the quoted figure of Rs 300 crore of near-expiry inventory by the All India Consumer Products Distributors Federation.
The dominos effect started a week ago when the beauty and personal care retailer announced its second-quarter earnings.
Shares closed at Rs 371.55 apiece on Thursday, November 14 just before the company released the earnings report.
The Varun Alagh-led company clocked a loss-making quarter after its previous green P&Ls. It posted a loss of loss of Rs 18.71 crore in the July-September 2024 quarter from a profit of Rs 29.78 crore in the corresponding quarter in the previous year.
It has been clocking slower revenue growth across quarters. The company reported a 19% rise in its operating revenue in Q1FY25 and 21% YoY growth in Q4 FY24. Its latest quarter witnessed a de-growth of 7% to Rs 461.82 crore.
Edited by Affirunisa Kankudti