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Mamaearth parent dismisses distributors’ claim of Rs 300-cr unsold inventory as ‘misinformation’

Economic Times

Economic Times · 8m ago

Mamaearth parent dismisses distributors’ claim of Rs 300-cr unsold inventory as ‘misinformation’

Honasa Consumer, the parent company of Mamaearth, has denied allegations made by the All India Consumer Products Distributors Federation (AICPDF) regarding large unsold inventory. The AICPDF had claimed that near-expiry inventory caused a financial burden of Rs 300 crore for distributors, but Honasa Consumer stated that the total inventory in the distribution value-chain was Rs 40.69 crore. Mamaearth has undergone a restructuring in its general trade strategy, leading to a net loss of Rs 19 crore and a drop in operating revenue in the September quarter. This has resulted in a significant decline in Honasa Consumer's stock.

Related News

Honasa Consumer dismisses 'misinformation' around distributors, restructuring

Economic Times

Economic Times · 8m ago

Honasa Consumer dismisses 'misinformation' around distributors, restructuring

Mamaearth parent company Honasa Consumer has denied the claims made by the All India Consumer Products Distributors Federation (AICPDF) regarding its inventory. The company states that the distribution value chain holds inventory worth Rs 40.69 crore, not the reported Rs 300 crore. The company recently implemented a transition exercise to move away from the super-stockist model and towards direct distributors. This restructuring had a higher impact than expected, resulting in a net loss of Rs 19 crore and a drop in operating revenue for the September quarter. As a result, Honasa Consumer's stock has fallen over 30%.

Honasa clarifies quantum of unsold inventory in response to claims by distributors body

YourStory

YourStory · 8m ago

Honasa clarifies quantum of unsold inventory in response to claims by distributors body

Honasa Consumer, the parent company of Mamaearth, has revealed that its distribution value chain holds an inventory of Rs 40.69 crore, contradicting the All India Consumer Products Distributors Federation's claim of near-expiry inventory valued at Rs 300 crore. The company stated that it has received returns worth Rs 41.21 crore and is in the process of collecting the remaining Rs 21.32 crore from relevant distributors. Honasa successfully transitioned to a direct distribution model, removing super-stockists and sub-distributors, and reduced accounts receivables from Rs 46 crore to Rs 25 crore. The company's shares have been adversely affected by a loss of Rs 18.71 crore in Q2 2024 and a 7% decline in revenue.

Mamaearth parent Honasa loses its unicorn status as shares plunge

YourStory

YourStory · 8m ago

Mamaearth parent Honasa loses its unicorn status as shares plunge

Parent company of Mamaearth, Honasa Consumer, lost its unicorn status as shares dropped by 29% over consecutive sessions. The company's market cap fell to Rs 7,721 crore ($902 million), down from the previously projected IPO valuation of Rs 10,500 crore. Honasa clarified the inventory situation with distributors, stating a total inventory of Rs 40.69 crore, as opposed to the quoted figure of Rs 300 crore. Mamaearth's recent second-quarter earnings report showed a loss of Rs 18.71 crore, following previous profitable quarters. Revenue growth has also slowed in recent quarters.

Honasa to bring down inventory holding period for Mamaearth distributors

Livemint

Livemint · 12m ago

Honasa to bring down inventory holding period for Mamaearth distributors

Mamaearth's parent company, Honasa Consumer Ltd, is working to reduce its inventory holding period with distributors to 40 days from the current 90 days. The company plans to streamline its supply chain as it shifts from super-stockists to direct distributors. Honasa has partnered with logistics company Delhivery to enhance its supply chain, with further inventory reduction expected in the coming quarters. The move comes after distributors raised concerns about excessive inventory and delays in replacing damaged or unsold stock. Additionally, Honasa has decided to phase out its Ayurveda-focused brand, Ayuga, due to declining customer interest in certain Ayurvedic concepts.

Off the road, there's a Rs 52,000-crore pileup while car sales hit the brakes

Economic Times

Economic Times · 1m ago

Off the road, there's a Rs 52,000-crore pileup while car sales hit the brakes

Car dealerships in India face an unprecedented high in unsold vehicle inventory, valued at Rs 51,000-52,000 crore, due to continued manufacturer push despite low retail demand. The inventory has remained stagnant for over 50 days, exceeding the standard 21 days. Hyundai and Maruti claim healthy inventory levels, while certain models face waitlists. Analysts foresee potential demand improvement only in the latter half of FY25, with recent interest rate cuts possibly aiding in demand recovery.

Honasa Consumer listing puts focus on investors’ returns, unrealised gains

Economic Times

Economic Times · 1y ago

Honasa Consumer listing puts focus on investors’ returns, unrealised gains

Honasa Consumer, the parent company of Mamaearth, and the attention now being given to the returns made by its investors and the unrealized gains of non-selling shareholders. Fireside Ventures, an early investor, has raised Rs 258 crore from the IPO and still holds unsold investments worth Rs 821.49 crore. Stellaris Venture Partners, another early investor, sold a stake worth Rs 437.3 crore, including Rs 355 crore from the IPO. Angel investors, including Snapdeal founders, also saw significant returns.

Honasa Consumer undertakes general trade channel revamp for offline growth

YourStory

YourStory · 12m ago

Honasa Consumer undertakes general trade channel revamp for offline growth

Honasa Consumer, the parent company of Mamaearth, is planning to shift its distribution model and undertake an inventory pipeline correction project called "Neev". The company aims to increase its offline distribution and focus on its house of brands strategy. This move aligns with their transition from a super stockist distribution model to direct distributors for the general trade channel. Honasa Consumer's efforts in scaling and improving brand mix have resulted in an 8.3% increase in EBITDA margin during the April-June quarter. However, the company discontinued its Ayurvedic Beauty Products brand, Ayuga, due to a lack of product-market fit.

Mamaearth founders selling shares in IPO is part of a new-age company trend

Economic Times

Economic Times · 1y ago

Mamaearth founders selling shares in IPO is part of a new-age company trend

The founders of beauty and personal care brand Mamaearth, Varun Alagh and Ghazal Alagh, are selling 32.86 lakh shares in the IPO of Honasa Consumer Ltd., the parent company. The founders are expected to raise between Rs 101.22 crore and Rs 106.47 crore through this sale. This trend of founders selling shares in IPOs is common among new-age companies, as seen in previous IPOs like Paytm and Nykaa. Founders claim it helps generate liquidity and build confidence among other selling shareholders.

Mamaearth parent Honasa targets Gen Z users with cosmetic brand Staze

Economic Times

Economic Times · 1y ago

Honasa Consumer, the parent company of Mamaearth, has launched a new brand called 'Staze' in the colour cosmetics space, targeting the 18-24 age group. This is the seventh brand in Honasa Consumer's portfolio, offering products like lipsticks, kajal pens, foundations, compacts, and eyeliners. Staze aims to compete with established brands like Maybelline and Lakme with an average unit price of Rs 300-350. The company has previously ventured into the colour cosmetics category under the Mamaearth brand and achieved an annual revenue run rate of over Rs 150 crore.

Peak XV, others divest stake worth Rs 1,600 Cr in MamaEarth’s parent

Entrackr

Entrackr · 11m ago

Peak XV, others divest stake worth Rs 1,600 Cr in MamaEarth’s parent

Peak XV (formerly Sequoia Capital), along with Stellaris Ventures, Sofina Ventures, and Fireside Ventures, collectively sold shares worth Rs 1,600 crore ($190 million) in Honasa Consumer Limited, the parent company of the direct to consumer (D2C) skincare and beauty brand MamaEarth. The aforementioned investors sold 3.24 crore shares of MamaEarth at an average price of Rs 495.48 per share, according to the company’s bulk deal data accessed from the National Stock Exchange. Peak XV and its former entity Sequoia Capital Global Growth Fund III divested around Rs 753 crore ($90 million) worth of shares, while Sofina Ventures, Stellaris Ventures, and Fireside Ventures sold shares worth Rs 298 crore, Rs 225 crore, and Rs 326 crore, respectively, during the bulk deal. Importantly, ICICI Prudential Life and Morgan Stanley collectively purchased Rs 262 crore worth of shares in MamaEarth. According to Entrackr’s estimates, MamaEarth sold 10% of its shares in this single bulk deal. The firm’s total outstanding shares stood at 32.42 crore as of June 30, 2024. The sale of shares came at a time when the Gurugram-based firm reached its all-time high share price of Rs 547 on Tuesday this week. As per NSE data, MamaEarth’s overall market capitalization stood at Rs 16,046 crore ($1.91 billion) as of September 12. In the first quarter of the current fiscal year, the company reported a 17.6% quarter-on-quarter increase in revenue, reaching Rs 554 crore, up from Rs 471 crore in Q4 FY24. This marked the firm’s most profitable quarter, with Rs 40 crore in profit after tax (PAT). Peak XV’s recent exit portfolio includes companies like Blinkit, Zomato, Freshworks, Awfis, Ixigo, Go Fashion, MamaEarth, and others.

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