Nykaa shares hit all-time low at ₹975. Here's why

Shares of FSN E-Commerce Ventures Ltd, the parent company of cosmetic and beauty brand Nykaa fell for the third straight day on Friday, thus hitting an all-time low at ₹975. The development comes as the one-year lock-in period for pre-IPO investors expires on November 10.

On Friday, the stocks of Nykaa opened at ₹1,048 and briefly hit an intra-day high of ₹1,053. At 3:30 pm, the stocks were trading at ₹983. The company’s shares hit a 52-week high at ₹2,574 on November 26, 2021. The company made a blockbuster Dalal Street debut in November last year. The shares were listed at an issue price of ₹1,125 apiece.

However, the stocks have plunged sharply, trading over 50% lower since its listing. The counter has delivered a negative return of 35% in the calendar year 2022, while it has fallen 24% in the past six months. The company’s market capitalisation has also slipped sharply to ₹46,555 crore.

Nykaa will be announcing quarterly results for the July to September quarter on November 1. However, in the June quarter, the company reported a 33.4% growth in consolidated net profit at ₹4.55 crore, vs ₹3.41 crore in the year-ago period. Sequentially, the profit declined 47.6% from ₹8.56 crore in the March quarter (Q4 FY22). Earlier this month, the cosmetic major, for the first time, approved bonus shares in the ratio of 5:1 i.e. five bonus shares for every one share held in the company, in a bid to woo investors. The record date for the purpose of determining members eligible for bonus equity shares is November 3, 2022. Recently, global brokerage BofA Securities maintained its neutral rating on Nykaa, with a target price of ₹1,685, citing its cosmetics business remained steady, and margins were largely flattish. The agency said there would be a limited inflation impact on the company, while its pace of margin would be slower than the last year.

Nykaa on Thursday appointed Rajesh Uppalapati as the chief technology officer. He will replace the incumbent Sanjay Suri from November 1. “As a member of the Intuit India leadership steering committee, Uppalapati was a key contributor to the India site’s strategic priorities and was also the executive sponsor for Intuit India tech culture charter,” the company said.