Honasa Consumer, the parent company of Mamaearth, has received approval to merge its two subsidiaries, Just4Kids Services and Fusion Cosmecutics. This move aims to reduce costs, improve financial efficiency, and strengthen the company’s competitive position.
The merger will simplify operations and improve cash management by removing extra management layers. Fusion Cosmecutics, which owns Dr Seth’s, reported revenues of INR 76.6 crore in the first nine months of 2024. Just4Kids, which runs Momspresso, earned INR 4 crore during the same period.
This decision follows earlier moves to cut back on Momspresso’s operations. Honasa faced a loss in goodwill in FY23 but is looking for better financial results after the merger. The market reacted positively, with Honasa’s shares rising on the BSE.
20 April 2024 — Honasa Consumer, the parent entity of Mamaearth, has received board approval to merge two wholly owned subsidiaries, Just4Kids Services Private Limited and Fusion Cosmecutics Private Limited, with itself.
The amalgamation aims to eliminate cost duplication, enhance financial efficiencies, maximize shareholder value, and improve the competitive position of the combined entity, as stated by Honasa in an exchange filing.
Honasa highlights that the amalgamation will streamline operations, bring focused management, and enhance cash management efficiency by eliminating structured layers within the organization.
Fusion Cosmecutics, the parent company of Dr Seth’s, reported a revenue of INR 76.6 Cr in the first nine months of 2024. Just4Kids, the parent company of Momspresso, offers parenting tips and advice and reported a revenue of INR 4 Cr in the same period.
The amalgamation comes after strategic decisions such as scaling down Momspresso’s business verticals and shutting down specific segments, as reported in Mamaearth’s red herring prospectus (RHP) and previous media coverage.
Honasa incurred a goodwill impairment loss in FY23 but aims for improved financial performance post-amalgamation. The market responded positively, with Honasa’s shares ending higher on the BSE.
Conclusion:
The amalgamation of Honasa’s subsidiaries reflects a strategic move to enhance operational efficiency, streamline management, and improve financial performance, aligning with Honasa’s growth objectives and market expectations.
