PC: The Economic Times
In the latest development in the direct-to-consumer skincare and beauty vertical, Peak XV, along with Stellaris Ventures, Sofina Ventures, and Fireside Ventures, together sold shares worth Rs 1,600 crore ($190 million) in Honasa Consumer Limited, the parent company of the leading brand MamaEarth. The deal underlines the shifting dynamics of the consumer goods industry and also showcases investors’ faith in unlocking value through strategic divestments.
The bulk deal reflected the sale of 3.24 crore shares of MamaEarth by the abovementioned investors at an average price of Rs 495.48 apiece, data from the National Stock Exchange shows. Peak XV, as Sequoia Capital was earlier known, along with its growth fund, sold shares worth about Rs 753 crore ($90 million), while Sofina Ventures, Stellaris Ventures and Fireside Ventures sold shares worth Rs 298 crore, Rs 225 crore and Rs 326 crore, respectively, in the deal.
Of particular interest, the key buyers included ICICI Prudential Life and Morgan Stanley, acquiring shares worth Rs 262 crore collectively. According to an analysis by Entrackr, MamaEarth had sold 10% of its shares in the bulk deal, as against the total outstanding shares of the firm at 32.42 crore as of June 30, 2024.
The sale of shares came when MamaEarth attained an all-time high share price of Rs 547 earlier this week, with the company in high spirits for its good market performance and interest shown by investors. Notably, MamaEarth’s market capitalisation touched Rs 16,046 crore ($1.91 billion) as of September 12, reflecting the brand’s increasing prominence and investor appeal within the beauty and skincare segment.
For the first quarter of the current fiscal year, MamaEarth saw a considerable 17.6% quarter-on-quarter growth in revenue, reaching Rs 554 crore, which was substantially higher from Rs 471 crore in Q4 FY24. This quarter was the most profitable quarter with a profit after tax (PAT) of Rs 40 crore, showing its strong financial performance and growth trajectory.
Recent divestments include Blinkit, Zomato, Freshworks, Awfis, Ixigo, Go Fashion, MamaEarth, among others. This strategic exit from the parent of MamaEarth points toward strategic realignment in investments at Peak XV and its commitment to optimizing returns and leveraging new opportunities in consumer goods and D2C space.
While MamaEarth has been forging its way through competitive times in beauty and skincare, this latest sale of shares has marked a new beginning in the growth saga of the company, while promising value unlocking and sustainable growth to its investors in an evolving consumer goods market.
