Nykaa looks ugly

Nykaa seems to be going the Zomato way. Opening around the same levels as yesterday at Rs.1048, the stock sunk to hit a new low today at Rs.975.50. And to think that almost a year ago it had hit a high at Rs.2574. Its IPO last Nov was priced at Rs.1125.

Its market cap has slipped below Rs.50k crore to around Rs.47.5k crore.

The company announced a bonus of 5 shares for every 1 share held on 3rd Oct  but that has failed to cheer the stock price.

The main reason – the pre-IPO lock-in for pre-IPO investors is scheduled to end on 10th Nov. This means, all the biggies like TPG Growth (2.3%), Lighthouse India Fund (2%), Steadview Capital (3.5%), Kravis (1.1%) Fidelity (1.3%) and HNIs too like Harindarpal Singh Banga (6.4%), Narotam Sekhsaria (3.1%), Mala Gaonkar (2.4%%) and Sunil Kant Munjal (3%) will be eligible to sell their holdings soon. Around 16.48 crore shares or 34.70% stake will become “free” and if one has to go by the way in which Zomato behaved, there is some more fall ahead.

Nykaa has promoter shareholding of 52.38% which will stay locked-in for another 6-months.