Sequoia cuts Honasa stake to 2.68 per cent after Rs113 crore sale

MUMBAI: Honasa Consumer’s shareholder register is getting a little lighter on Sequoia, with one of the company’s early institutional investors trimming its stake in the Mamaearth parent through an open-market sale.

Sequoia Capital Global Growth Fund III – U.S./India Annex Fund L.P. has reduced its holding in Honasa Consumer to 2.68 per cent after selling 25,02,289 equity shares on September 30, 2026. The transaction, disclosed under the Securities and Exchange Board of India’s takeover regulations, brings Sequoia’s voting stake down from 3.44 per cent to 2.68 per cent.

Following the sale, Sequoia holds 87,26,204 shares in Honasa, compared with 1,12,28,493 shares before the transaction. On a fully diluted basis, its holding has declined from 3.41% to 2.65%.

The shares sold represent 0.77% of Honasa’s total share and voting capital and 0.76% of its fully diluted share capital. The transaction involved voting equity shares and was executed entirely through the open market, meaning there was no fresh issuance or buyback by Honasa as part of the deal.

The disclosed transaction comes alongside a much larger reduction by Peak XV Partners Investments VI, which is identified as a person acting in concert with Sequoia. Peak XV sold 1,07,55,495 shares on the same date, reducing its holding from 14.80% to 11.50% of Honasa’s voting capital.

Redwood Trust is also identified as a person acting in concert with the seller. The regulatory filing states that Peak XV and Redwood Trust have also sold shares and will make separate disclosures under the applicable regulations.

Together, the transactions mark a sizeable shift in the holdings of some of Honasa’s early institutional investors. Sequoia, however, remains a shareholder with 87,26,204 shares after the September 30 transaction, while Peak XV continues to hold a significant stake despite its reduction.

Honasa had 32,60,24,216 equity shares on a non-diluted basis and 32,90,26,231 shares on a fully diluted basis as of June 30, 2026. The Sequoia transaction therefore represents a relatively small reduction in the overall shareholding structure, even as the movement is notable given the investor’s history with the company.

The Sequoia disclosure itself does not specify the consideration paid for the shares. Exchange disclosures, however, put the sale price at around Rs450 per share, implying a transaction value of approximately Rs112.6 crore.

Peak XV’s 1,07,55,495-share transaction was executed at around Rs450.22 per share. Both transactions were secondary-market sales, meaning the shares changed hands between existing investors rather than involving a capital infusion into Honasa.

The stake reduction comes against a backdrop of improving financial performance at Honasa. The company reported consolidated revenue from operations of Rs2,391.94 crore in FY26, up 15.72% from Rs2,066.95 crore in FY25.

Profit growth was considerably sharper. Consolidated net profit rose to Rs200.19 crore in FY26 from Rs72.69 crore a year earlier, giving the company a substantially stronger bottom line as it entered FY27.

The momentum continued into the first quarter. Honasa reported consolidated revenue of Rs755.95 crore in Q1 FY27, representing 27% year-on-year growth.

Operating profit jumped 140.61% to Rs110.20 crore, while net profit increased 118.85% to Rs90.45 crore. The figures marked a sharp improvement in profitability alongside the company’s continued investment in its portfolio of beauty and personal care brands.

The March quarter had also delivered a record quarterly revenue of Rs657.08 crore. Honasa reported consolidated EBITDA of Rs77 crore and profit after tax of Rs69 crore for Q4 FY26, while full-year consolidated PAT crossed Rs200 crore.

The company’s improving profitability has also translated into shareholder returns. Honasa’s board recommended its maiden final dividend of Rs3 per equity share for FY26, which was subsequently approved by shareholders in September.

The shareholding changes come as Honasa continues to expand beyond Mamaearth and build a broader beauty and personal care portfolio. Its brands include Mamaearth, The Derma Co, Aqualogica, BBlunt, Dr Sheth’s, Staze Beauty and Luminéve.

The company has also been pushing its brands across a wider mix of distribution and consumer touchpoints, reflecting its evolution from a predominantly digital-first business into an increasingly omnichannel player.

Its marketing strategy is evolving alongside the changing consumer discovery landscape. Mamaearth was reported in September to have become one of the early Indian advertisers on ChatGPT, as OpenAI develops its advertising ecosystem and brands increasingly explore AI-led product discovery.

The move comes as Honasa continues to invest in advertising and brand building. Reports citing the company’s June-quarter numbers put its advertising expenditure at around Rs241 crore during the quarter.

Honasa’s FY26 disclosures also highlighted investments in content, product innovation, distribution and AI-led content systems, alongside the expansion of its younger brands. The company’s strategy has increasingly centred on building a portfolio that can generate growth across multiple beauty and personal care categories rather than relying solely on Mamaearth.

Against that backdrop, Sequoia’s latest transaction is more about a change in an existing investor’s holding than a change in Honasa’s underlying share capital. The September 30 sale leaves Sequoia with more than 2% of the company, while Peak XV remains a sizeable shareholder after its own stake reduction.

For Honasa, then, the investor ledger may be changing, but the operating story is moving in the other direction towards a broader portfolio, stronger profitability and a business increasingly looking beyond its Mamaearth roots.