How Mamaearth parent Honasa Consumer stock caught fire on merger with its own subsidiaries

Honasa Consumer witnessed strong volume as around 3 crore shares changed hands on BSE and NSE combined compared to a one-month average of 8 lakh shares.

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

Honasa Consumer, the parent company of Mamaearth, BBlunt and The Derma Co, saw its market capitalization leap to over Rs 17,000 crore following a significant 15 percent surge in its share price on August 26.

This translated into a market-cap gain of around Rs 1,800 crore in absolute terms. The reason: the company got a nod to merger with itself two of its fully-owned subsidiaries with assets totalling Rs 48 crore.

On August 23, the National Company Law Tribunal, Chandigarh, approved the merger scheme between Honasa Consumer with two of its subsidiary companies namely, Just4Kids Services Pvt Ltd and Fusion Cosmeceutics Pvt Ltd.

The primary objective of this merger, as shared by Honasa Consumer, is to prevent cost duplication and enhance financial efficiencies, making the combined operations more cost-effective and "thereby maximizing shareholder value".

Follow our market blog to catch all the live action

The big deal

To recall, Just4Kids is the parent company of Momspresso, which was Honasa's first acquisition for Rs 168 crore. Meanwhile, the D2C company acquired a majority stake in Fusion Cosmeceutics in May 2022 at a valuation of Rs 28 crore. In the first nine months of FY24, Fusion Cosmeceutics reported a revenue of Rs 76.6 crore, while Just4Kids reported a revenue of Rs 4 crore during this period.

According to company documents, as of December 31, 2023, Just4Kids Services had a paid-up capital of Rs 9.61 lakh. The company held total assets worth Rs 33.6 crore, including Rs 8.64 crore in non-current assets and Rs 25.01 crore in current assets as of March 31, 2023. On the liability side, the company had equity capital of Rs 26.24 crore, with non-current liabilities of Rs 1.95 crore and current liabilities totalling Rs 5.45 crore.

Fusion Cosmeceutics, on the other hand, has a paid-up capital of Rs 1.88 lakh. The company’s total assets are valued at Rs 13.89 crore, primarily consisting of Rs 13.87 crore in current assets and a modest Rs 2.19 lakh in non-current assets. Its liabilities include equity capital of Rs 1 crore, with non-current liabilities of Rs 8.04 crore and current liabilities amounting to Rs 14.85 crore.

Gains from the merger

According to Honasa Consumer, the merger will prevent cost duplication and enhance financial efficiencies, making the combined operations more cost-effective and "thereby maximizing shareholder value". This merger will also eliminate layered structures and reduce managerial overlap, streamlining management and improving overall efficiency, the company said in a regulatory filing.

Furthermore, by integrating the management structure and aligning business strategies, Honasa aims to accelerate growth, expand market reach, and develop their respective businesses further.

Additionally, the merger will allow for greater efficiency in cash management, providing access to a larger cash flow that can be deployed more effectively for both organic and inorganic growth opportunities, ultimately enhancing shareholder value, it said. Analysts Moneycontrol reached out to were unavailable for comments on potential gains Honansa may make because of synergies owning to the merger.

Moneycontrol also reached out to Honasa Consumer to seek clarity on the projected cost savings and financial efficiencies expected from this merger, and the market segments they aim to access or strengthen through this amalgamation. At the time of reporting this story, the company has not responded to the queries.

Also Read | Honasa Consumer zooms 15% to new high on NCLT nod for Just4Kids, Fusion Cosmeceutics merger

Rs 1,800 crore wealth generated in a day

Honasa shares surged to an all-time high of Rs 537.90 on NSE on August 26. The counter witnessed strong volume as around three crore shares changed hands on BSE and NSE combined, compared to a one-month average of eight lakh shares. The stock made its debut on NSE on November 7 last year at Rs 330, and since then, it has rallied 63 percent.

The share price of Mamaearth has more than doubled from its 52-week low of Rs 256.10, hit on November 10, 2023. So far this year, the counter has rallied around 23 percent, beating Nifty's returns of around 13 percent during this period.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.