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Mamaearth's Parent Honasa Denies Reports Of ESOP Block Deal

Contrary to the earlier report, Honasa Consumer Care clarified through an official email that there is no block deal in progress concerning ESOPs

Honasa Consumer Care, the parent company of popular personal care brand Mamaearth, has issued a statement refuting recent reports of a block deal involving Employee Stock Ownership Plans (ESOPs). The denial comes in response to a media report on 27 November, which had suggested that employees of Honasa were poised to sell shares worth Rs 150 crore in a block deal during the week.

Contrary to the earlier report, Honasa Consumer Care clarified through an official email that there is no block deal in progress concerning ESOPs. The reported block deal was speculated to be at a discount of 5-7 per cent to the market price of Rs 477.10. The Employee Stock Ownership Plan pool was expected to comprise approximately 31 lakh shares, with Kotak acting as the broker for the deal.

Shares of Honasa Consumer have demonstrated robust performance since its listing, witnessing a surge of over 47 per cent from the issue price of Rs 324. On 24 November, the stock closed 12 per cent higher on the NSE. Notably, the company has issued stock options under two schemes - ESOP 2018 and ESOP 2021, as outlined in its prospectus.

In its financial report for the quarter ended 30 September, Honasa Consumer revealed a significant 93 per cent surge in consolidated net profit, reaching Rs 29 crore, compared to Rs 15 crore in the corresponding period last year. The firm's consolidated revenue from operations also experienced a notable uptick, rising by 21 per cent to Rs 496 crore in Q2FY24, up from Rs 410 crore in the year-ago period.

Foreign broking firm Jefferies has been a strong advocate for Honasa Consumer, recently adding the company to its model portfolio on 23 November. Jefferies, in a note, expressed confidence in the company's growth trajectory, citing a consistent 30 per cent+ revenue growth and steady margin expansion. The firm emphasised Honasa's focus on premium customers, anticipating resilience against economic slowdowns and inflation.

The stock, which has been on an upward trajectory, garnered further attention after Jefferies assigned it a target price of Rs 530, replacing Marico in their model portfolio. The positive outlook reflects Honasa Consumer's commitment to sustained growth and its ability to navigate challenging economic conditions.


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