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Fireside Ventures Rakes In 4500% Profit with Honasa Consumer Stake Sale

Fireside Ventures has earned a 4500 percent profit by selling its stake in Mamaearth's parent company Honasa Consumer

Fireside Ventures Rakes In 4500% Profit with Honasa Consumer Stake Sale

Outlook Start-Up Desk

POSTED ON December 05, 2023 3:53 PM

Fireside Ventures earned a 4500 percent profit by selling its stake in Honasa Consumer, the parent company of Mamaearth, as per a report by Moneycontrol.

According to the IPO draft, Fireside Ventures purchased the company's shares at a price of Rs 7.33. During the IPO, the venture firm sold 79.7 lakh shares at a price of Rs 324 through an offer for sale. Today, it further sold 62.9 lakh shares through a block deal at an average price of Rs 352. Following these transactions, the venture capital firm now holds a 5.5 percent stake in Mamaearth, equating to over 1.81 crore shares. 

Fireside has made substantial profits by selling Mamaearth's shares, the report added. According to market regulator SEBI's rules, the possibility of a significant block deal is not allowed for some time after listing. 

According to media reports citing market experts, Fireside Venture has exempted Category 1 Alternate Investment Funds holding less than 20 percent of the pre-offer share capital from the 6-month lock-in period, as per Regulation 17 of SEBI ACDR Regulations. Fireside Venture Fund and Stellaris Ventures Partners fall under this category. Excluding today's sale, both together hold a 13.3 per cent stake in the parent company of Mamaearth. 

The company's net profit doubled to Rs 30 crore in the September quarter, while revenue increased by 21 per cent on an annual basis, with volume growth reaching 27 per cent.

Following the results, brokerage firm Jefferies set the target price at Rs 530. According to Jefferies, Honasa is expected to grow at a rate of 27 per cent in the next three years. 

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