Lighthouse To Further Offload Stake In Nykaa, Sell Shares Worth INR 335 Cr

SUMMARY

Lighthouse would offer up to 2% discount on Nykaa’s closing price of INR 183.55 in the block deals

Following the expiry of the lock-in period for Nykaa’s per-IPO investors, Lighthouse offloaded shares of the beauty ecommerce platform during the last two weeks as well

Several other pre-IPO investors of Nykaa – from TPG Capital to Mala Gopal Gaonkar – also aggressively sold their stakes in the startup

Private equity firm Lighthouse is reportedly set to sell Nykaa shares worth INR 335 Cr via block deals.

The shares would be offered at up to a 2% discount to its Monday’s closing price of INR 183.55, a report said. The Bank of America Corporation (BofA) is the banker appointed for the deal.

The development comes after Lighthouse India Fund III Limited sold 3 Cr Nykaa shares worth a total of INR 252.4 Cr last week in a bulk deal. Prior to that, it sold over 96 Lakh shares as the startup’s lock-in period ended on November 10.

As per the shareholding pattern for September quarter, Lighthouse India Fund III held a total stake of 2.04% in Nykaa with over 96 Lakh shares in its holding. After Nykaa issued bonus shares in the ratio of 5:1, the number of shares has increased.

Besides Lighthouse, several other pre-IPO investors of Nykaa – from TPG Capital to Mala Gopal Gaonkar – have aggressively sold their stakes in the beauty ecommerce giant in the last two weeks.

TPG Capital offloaded INR 1,000 Cr worth of Nykaa shares last week, while Gaonkar offloaded 5.75 Cr shares at an average price of INR 175.48 per share, realising a total value of INR 1,009 Cr. Segantii India Mauritius also sold a majority of the shares, over 33.7 Lakh, last week.

Shares of Nykaa have witnessed significant volatility in the last few weeks due to the expiry of the lock-in period. Last week, the shares declined about 7.5%.

Nykaa shares fell another 4.6% on the BSE on Monday, ending the session at INR 183.55.

Some brokerages had already predicted large sell-offs post the lock-in expiry as some of Nykaa’s pre-IPO investors were sitting on almost 100X returns.

In fact, Nykaa’s Q2 FY23 results were better than the Street estimates. The startup reported INR 5.2 Cr in net profit during the quarter, which was over a 300% jump year-on-year (YoY). However, its profit remained almost flat sequentially.

Though the beauty and personal care segment registered impressive growth, the fashion vertical’s growth was slightly muted during the quarter.

Nykaa’s ex-date for bonus shares coinciding with the lock-in expiry cushioned the shares from large sell-offs, but the crediting of bonus shares in demat accounts has brought the stock under pressure.