Nykaa Shares Down Nearly 20% in 4 Days As Block Deals Continue; Know Details

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Nykaa Share Price: Shares of FSN E-Commerce Ventures Ltd., owner of beauty e-retailer Nykaa, tumbled 4 percent today on heavy volumes, after multiple trades took place in the block deal window. Nykaa shares fell 4 per cent to Rs 171 at day’s low, extending the four-day losses to about 20 per cent. According to NSE data, LIGHTHOUSE INDIA FUND III LIMITED sold 96,89,240 shares on November 10 at average price of Rs 171 per share. Among other major sellers, SEGANTII INDIA MAURITIUS sold 33,73,243 shares at average price of Rs 199 on November 15.

As per the information available, one block of 18 million shares worth Rs 319.25 crore changed hands on the BSE at an average price Rs 176.95 per piece. Another block of 12 million shares were sold off at an average price of Rs 176.70 a piece. There were many more such blocks.

Ever since its lock-in expiry on November 9, the counter has seen several trades. Foreign investors Segantii India Mauritius, Norges Bank, Aberdeen Standard Asia Focus Plc, Societe Generale and Morgan Stanley Asia Singapore (Pte) picked up stake as pre-IPO investors Narotam Sekhsaria, Lighthouse India, TPG Growth sold their holdings.

After buying 38 lakh shares on November 9 at an average price of Rs 175.75 apiece, Segantii India sold over 33 lakh shares on November 15 for Rs 199.24 apiece.

Stocks often fall after lock-ups expire, as investor selling puts downward pressure on shares. Food-delivery company Zomato Ltd. had plunged to a record low in July when a lock-up on its shares expired. Since Nykaa’s bumper market debut in November last year, its shares have tumbled to drop below their IPO price.

VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said now there is high activity in some of these stocks where the lock-in period of initial investors is ending. There is huge supply and high volatility in their stock prices. Some like Nykaa are profitable. Some of these stocks have a long runway of potential high growth over many years. Some of them may turn out to be big wealth creators in the long run. So this segment may be keenly watched.”

Nykaa was founded by Falguni Nayar in 2012. The shares of the Mumbai-based company were listed on NSE and BSE on November 10 last year at Rs 2001, a premium of 77.87 per cent. Nykaa IPO was subscribed 81.78 times and the price band was fixed at Rs 1,085-1,125 per share.

Nykaa Financials

In the September quarter, the beauty major logged a 344 per cent year-on-year (YoY) increase in net profit at Rs 5.2 crore, while the company’s revenue from operations surged 39 per cent YoY to Rs 1230.8 crore.

“During the quarter, we continued to demonstrate strong GMV growth with improvement in gross margin, efficiency in fulfilment and marketing cost lead to improvement in EBITDA margin YoY,” Nykaa said in an exchange filing.

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