Nykaa falls as 1.4 crore shares change hands in a block deal

After a series of block deals in November and December 2022, FSN E-Commerce Ventures - parent of Nykaa - saw its first block deal of 2023 with 1.4 crore shares changing hands on January 12. Buyers and sellers were not known immediately.

The stock opened lower at Rs 153 apiece on the National Stock Exchange, as against Wednesday's close of Rs 155. At 9:30 am, it quoted Rs 153.15, down 1.26 percent.

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According to Bloomberg, the shares were offered by an undisclosed seller at Rs 148.90 a piece to raise $26 million via block. The selling price indicated a 4 percent discount to yesterday's closing price.

Moneycontrol could not independently verify the report.

On November 9, the lock-in period for Nykaa's pre-IPO shareholders expired. Almost 67 percent of Nykaa’s shareholding was released from lock-in with the end of the restricted period. That is equal to about 310 million shares.

Following this, funds like Lighthouse India Fund, TPG Growth and high networth individuals like Mala Gaonkar and Narotam Sekhsaria offloaded some stake in the counter.

In Q2FY23, Nykaa's net profit jumped over 300 percent to Rs 5.19 crore against Rs 1.17 crore in Q2FY22. The numbers were better than analyst estimates on gross merchandise value, revenues and Ebitda, led mainly by beauty and personal care (BPC) segment.

“The stock has corrected partly due to the global tech sell-off on rising yields and more recently due to the imminent lock-in expiry,” believes HSBC Securities and Capital Markets. “We believe valuation is now even more appealing and under-appreciates the structural growth opportunity in beauty and personal care.”

HSBC has the most bullish target on Nykaa, at Rs 2,180. Meanwhile, the stock is down over 60 percent since its listing in November 2021.