Honasa’s board approved the amalgamation of two of its wholly owned subsidiaries – Just4Kids Private Limited and Fusion Cosmecutics Private Limited – with itself
The Mamaearth parent said the amalgamation will prevent cost duplication, bring in financial efficiencies, eliminate structured layers, and bring concentrated management focus
Fusion Cosmecutics Private Limited is the parent company of Dr Seth’s, while Just4Kids is the parent company of Momspresso, offering parenting tips and pregnancy advice to mothers
Delhi-NCR based Honasa Consumer, the parent entity of D2C brand Mamaearth, said its board has approved the amalgamation of two of its wholly owned subsidiaries – Just4Kids Services Private Limited and Fusion Cosmecutics Private Limited – with itself.
In an exchange filing, Honasa said that the scheme of amalgamation would be subject to various regulatory approvals, including those from the New Delhi and Chandigarh benches of the National Company Law Tribunal.
Honasa said the amalgamation will prevent cost duplication and bring in financial efficiencies. “The resultant operations are expected to be substantially cost-efficient which would result in maximising overall shareholder value and will improve the competitive position of the combined entity,” it said.
Besides, the amalgamation will eliminate structured layers, bring concentrated management focus, and help in greater efficiency in cash management, it added.
Fusion Cosmecutics is the parent company of Dr Seth’s, a brand primarily engaged in formulation and trading skincare products. Mamaearth
acquired a majority stake in Fusion Comecutics in May 2022 at a valuation of INR 28 Cr. In the first nine months of 2024, Fusion Comecutics reported a revenue of INR 76.6 Cr.
On the other hand, Just4Kids is the parent company of Momspresso, offering parenting tips and pregnancy advice to mothers across languages, including English, Hindi, and eight other regional languages.
It is pertinent to note that Momspresso was Mamaearth’s first acquisition for INR 167.9 Cr. Ahead of its IPO, Momspresso’s website was pulled down and is inaccessible even now.
In July last year Inc42 exclusively reported that Mamaearth was shutting down two verticals of Momspresso – Momspresso MyMoney and its brand marketing vertical. Before shuttering these verticals, the startup sacked 80-100 employees earlier in 2023.
As per Mamaearth’s red herring prospectus (RHP), the startup’s board, in a meeting in March 2023, decided to “scale down” a majority of Momspresso’s business verticals.
Besides this, Honasa had to take a goodwill impairment loss to the tune of INR 136 Cr in FY23, resulting in it registering a net loss of INR 151 Cr during the year. Mamaearth wrote-off goodwill of INR 136 Cr for Just4Kids.
Overall, it reported exceptional items before tax of INR 155 Cr in FY23 due to the impairment of goodwill and other intangible assets. Without it, the startup would have reported a net profit of about INR 3.7 Cr during the year under review.
Just4Kids reported a revenue of INR 4 Cr in the first nine months of FY24.
Shares of Honasa ended Friday’s session 0.9% higher at INR 385.75 on the BSE.
