Nykaa’s board has approved the acquisition of western wear and accessories business of Nykaa Fashion by parent FSN E-Commerce in an INR 133.7 Cr cash deal
The company’s board also gave its nod to merge its content delivery arm Little Black Book (LBB) with Nykaa Fashion
Nykaa’s consolidated net profit tanked 48% sequentially to INR 9.07 Cr in Q4 FY23 while operating revenues also declined 6% QoQ to INR 1,667.9 Cr
Beauty ecommerce major Nykaa
has announced a major restructuring of its business verticals.
The company’s board on Wednesday (May 22) approved the acquisition of western wear and accessories business of Nykaa Fashion Limited by parent FSN E-Commerce for a cash consideration of INR 133.7 Cr.
“We wish to inform that the Board has approved to acquire the western wear and accessories business of Nykaa Fashion Limited… as a going concern on a slump sale basis, in accordance with the business transfer agreement to be entered between the company and the transferor company,” said the company in a regulatory filing with the BSE.
As per Nykaa, the move to transfer the western wear and accessories business to Nykaa Limited is in line with its strategy to streamline and consolidate owned brands business under a single entity. The deal is expected to be completed by September 2024.
Meanwhile, Nykaa also received board nod to merge its content delivery arm Little Black Book (LBB) with Nykaa Fashion. It first announced the transfer of its 100% stake in LLB’s parent Iluminar Media to Nykaa Fashion. Promptly afterwards, the board also gave its in-principle approval to merge LLB with Nykaa Fashion.
As per the company, the transfer of stake will be completed by December 2024.
The transactions involving Nykaa Fashion and LBB will be subject to approval from the National Company Law Tribunal (NCLT), the company’s shareholders, among others.
“The Scheme of Amalgamation will be placed before the Board of both the Companies at an appropriate time for approval and will be subject to necessary approvals from National Company Law Tribunal, shareholders and creditors of both the Companies and such other regulatory approvals, as may be required,” said Nykaa in a filling.
The developments came on the same day as Nykaa released its financial results for the quarter ended March 2024. The beauty ecommerce major’s consolidated net profit tanked by nearly half (48% to be precise) sequentially to INR 9.07 Cr in Q4 FY24 as against INR 17.45 Cr in previous quarter.
However, on a year-on-year (YoY) basis, profits jumped 1.2X from Q4 FY23’s INR 4.27 Cr.
Meanwhile, operating revenue also declined 6% QoQ to INR 1,667.9 Cr in Q4 FY23 but were up 28% YoY.
The restructuring also comes just a day after the company announced additional 4.05 Lakh stock options under its Employee Stock Option Policy (ESOPs) scheme, ahead of the Q4 results.
The results were declared hours after markets closed on Wednesday. The stock closed the day nearly 1% higher at INR 179.05 on the BSE.
