Nykaa Falls Below Issue Price as Lock-In For Pre-IPO Investors Expires Soon; Know Details

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Nykaa Stock Price Today: Shares of Nykaa’s parent company, FSN E-Commerce Ventures, fell as much as 2 per cent on Tuesday. As investors continued to dump Nykaa or FSN E-Commerce Ventures ahead of the mandatory lock-in expiry date for pre-IPO investors on November 10, the stock was down 2 per cent in trade at the day’s low of Rs 1,120.25.

Among all the new-age stocks that listed on Indian stock exchanges recently, Nykaa was among the best-performing ones as it had nearly doubled on listing day in November last year.

JM Financial is of the view that around 67 per cent or 31.9 crore shares are likely to open for trade on the expiry day. Steadview Capital Mauritius Ltd, TPG Growth IV SF Pte. Ltd, Lighthouse India Fund III, along with HNIs like Harindarpal Singh Banga, Narotam Sekhsaria and Sunil Kant Munjal will be eligible to sell their holdings.

If Nykaa follow’s Zomato’s script, then the shares might drop further. Shares of food delivery platform Zomato on July 25 tanked over 13 per cent to record lows after 78 per cent of its shares came out of the mandatory one-year lock-in after IPO.

Nykaa Stock: Should You Buy the Dip?

Meanwhile, JM Financial remains bullish on the company. “The current market price of Nykaa still implies strong valuations compared to most traditional companies but that does not factor in the growth seeds that the firm is planting by investing in fashion and e-B2B segments,” the brokerage said.

It has a buy rating on the stock with a target price of Rs 1,780.

ICICI Securities has a hold rating with a target price of Rs 1,250. “Investments in the differentiated value proposition of content, curation, and convenience are yielding results. We model revenue and core profit CAGRs (compound annual growth rates) of 42 percent and 90 percent respectively over FY22-FY24,” it said.

Global brokerage firm Nomura, which recently initiated coverage on the stock with a target price of Rs 1,365, said the risk-reward is quite favourable for long-term investors with the potential for the stock to double over the next five years.

“It is quite unique compared with most online companies due to its strong focus to curate brands and help customers in their discovery journey. Brands see it as a key partner in educating customers and driving adoption of premium products,” Nomura said.

Earlier this month, Nykaa announced that its board has approved the issuance of bonus equity shares of the company in the ratio of 1:5 i.e., the company will issue bonus of 5 shares for every 1 share held as on the record date. The company has fixed Thursday, November 03, 2022, as the record date for the purpose of determining members eligible for Bonus equity shares.

Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

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