Nykaa drops 8% as bonus shares start getting credited to demat account

Shares of beauty and fashion e-tailer dropped 8.5% to Rs 193.55 in Tuesday’s trade as its bonus shares started getting credited to demat accounts.

FSN E-Commerce Ventures, which runs Nykaa, earlier had announced a bonus share issue in the ratio of 5:1, which means that existing shareholders got five shares against every one share held as of the record date i.e. November 11.

A day after the stock started trading ex-bonus, Nykaa rallied over 19% to hit the day's high at Rs 224.45.

The timing of the ex-bonus date coincided with the expiry of the mandatory one-year lock-in period for pre-IPO investors on November 10.

PMS fund manager Deepak Shenoy had earlier warned in a tweet that if Nykaa did the bonus to reduce pressure from shareholders selling, this is a very short-sighted move and will backfire big time when shares actually come by.

At 12.17 pm, the scrip was trading 8% lower at Rs 194.6. The stock is down 54% from its 52-week high of Rs 429.86 per share.

Brokerages, however, remain bullish on the stock. Out of the 17 analysts with coverage on Nykaa, 10 have strong buy ratings, two buy, three hold and two sell calls, shows Trendlyne data.