Nykaa : As the pre-IPO lock-in period comes to an end, the share price of FSN E-Commerce Ventures, Nykaa’s parent company, fell as much as 2% on Tuesday, dropping below its initial public offering price of Rs 1,125.

At 2:15 p.m., the stock was trading at Rs 1,115 on the National Stock Exchange, down 2.5 percent. In the last five trading days, the stock has lost 3%. It is down 12.67% from the previous month.

The pre-IPO investor lock-in period ends on November 10. According to JM Financial, around 67 percent of the shares, or 31.9 crores, are expected to be traded on the expiry day. HNIs such as Harindarpal Singh Banga, Narotam Sekhsaria, and Sunil Kant Munjal will be able to sell their stakes, as well Steadview Capital Mauritius Ltd, TPG Growth IV SF Pte. Ltd, and Lighthouse India Fund III.


If Nykaa follows Zomato’s footsteps, its stock price could plummet even more. Zomato shares plunged more than 13% to new lows on July 25 after 78 percent of its shares were released from the mandatory one-year lock-in period following the IPO.

Nykaa went public on November 10, 2021, with a hefty 79 percent premium. Meanwhile, JM Financial remains bullish on the company. “The current market price of Nykaa implies good valuations compared to most traditional companies,” the brokerage added.

“However, this does not take into consideration the development seeds that the firm is planting by investing in fashion and e-B2B industries.” The stock is rated buy with a target price of Rs 1,780.

The stock is rated a hold by ICICI Securities, with a target price of Rs 1,250. “Investments in a differentiated value offer of content, curation, and convenience are yielding positive results.” “We estimate CAGRs (compound annual growth rates) in sales and core profit of 42 percent and 90 percent, respectively, between FY22 and FY24,” the company noted.

Nomura, a worldwide brokerage firm, has initiated coverage of the stock with a target price of Rs 1,365, claiming that the risk-reward ratio is attractive for long-term investors, with the stock having the potential to double over the next five years.

“It differs from most internet firms in that it places a major emphasis on selecting brands and supporting clients in their discovery process.” “Brands see it as a vital partner in educating customers and increasing premium product acceptability,” said Nomura.

Nykaa revealed earlier this month that its board of directors had approved the issuance of bonus equity shares in a 1:5 ratio, suggesting that the company will issue 5 shares for every 1 share owned as of the record date. The company has chosen Thursday, November 3, 2022, as the record date for determining who is eligible for Bonus equity shares.

Falguni Nayar founded Nykaa, a Mumbai-based Indian e-commerce firm, in 2012. It sells beauty, wellness, and fashion products online, through mobile apps, and in more than 100 physical storefronts. In 2020, it will become the first Indian unicorn startup managed by a woman.

Nykaa sells both indigenous and imported goods. In 2015, the company transitioned from an online-only to an omnichannel model and began selling things other than beauty. It expects to have over 2,000 companies and 200,000 products on its platforms by 2020.

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