Block deal today: Honasa Consumer shares in focus as 8.1% equity likely to change hands; floor price & more

Shares of Honasa Consumer Ltd, the Mamaearth parent, are in focus on Thursday morning as up to 8.1 per cent of its total equity is likely to change hands in large block deals today at a floor price of Rs 480 per share, valuing the deal at Rs 1,260.7 crore. The floor price is at 8.04 per cent discount to Honasa Consumer's Wednesday closing price of Rs 522. The scrip had settled 3.59 per cent lower in the previous session. 

Sellers, as per a source-based CNBC TV18 report, may include Redwood Trust, Fireside Ventures,  Sequoia Capital, Peak XV Partners, Sofina Ventures Stellaris Ventures. The report did not mention about the stake that each of these Honasa Consumer investors were selling. There would be a lock-in period of 60 days on any further sale of the shares following the transaction, the media report suggested. Business Today could not independently verify the report. 

Kotak Securities and Jefferies India are said to be the brokers managing the whole process.

Emkay Global earlier this month said it was positive on Honasa, given execution thrust by the management with a view to addressing offline channel needs in FY25. 

"Corrective actions in offline trade inventory are aimed at restoring channel hygiene and enhancing margin by 100-150bps from FY26E (with reduced provisioning), in our view. FY26E onward, we see margin logging in double digits, further aided by logistic cost optimization (with improvement in offline sales mix) and operating leverage benefits," it said. 

The brokerage retained its expectations of 21 per cent CAGR growth in revenue and 44 per cent CAGR in earnings, over FY24-27E. 

"We raise our target EV/sales to 6.5 times from 6 times, which is at 25 epr cent discount to market-cap weighted sector-average EV/sales of 8.5x. As we roll over from Jun-26E to Sep-26E sales, our target price gets hoisted to Rs 600 per share from Rs 525. Implied target Sep-26E EV/Ebitda stands at 54x and P/E at 68x, resp; maintain BUY," it said on September 2.