Nykaa Shares Hit New Low At INR 151.65, Fall Nearly 5%

Continuing their free fall, shares of beauty ecommerce platform Nykaa hit a record low of INR 151.65 during the intraday trading on the BSE on Wednesday (December 21). The stock ended the day 4.86% lower at INR 152.60.

The crash comes a week after Nykaa’s pre-IPO (initial public offering) investor, Kravis Investment Partners, sold shares worth INR 629 Cr in the public market via multiple block deals.

The beauty ecommerce platform’s shares have been on a downward spiral since the beginning of this month. The stock has plummeted nearly 11% in the last 20 days from its closing price of INR 171.30 on December 1.

At the end of the intraday trading on Wednesday, Nykaa’s total market capitalisation stood at INR 43,464.69 Cr, a far cry from INR 1 Lakh Cr it touched on the first day of its trading on the exchanges.

The drop has largely been attributed to the intense selloff triggered by the exodus of Nykaa’s pre-IPO investors on the expiration of the lock-in period. The melee has seen marquee backers such as TPG Growth, Segantii India Mauritius and Lighthouse India dump Nykaa’s shares in the open market in multiple block deals. 

The issue has been exacerbated by inflationary and other macroeconomic pressures that are expected to hit Nykaa’s bottomline. 

Among others, the startup is yet to post big profit numbers and revenue which has also spooked investors. The beauty ecommerce platform reported a net profit of INR 5.2 Cr in the second quarter (Q2) of the financial year (FY23), while its operating revenue stood at INR 1,230.8 Cr during the same period. 

The company also came out with bonus share issuance to arrest the slide in shares. However, the move came under criticism as the bonus share issue date coincided with the lock-in expiry for its pre-IPO investors.