Editor's Take: Anil Singhvi explains why Nykaa's bonus share plan is not attractive

In today’s edition of Editor’s Take, Zee Business Managing Editor, Anil Singhvi compared ITC and Nykaa’s stock price. With Nykaa planning to issue bonus shares, he shared his views on why issuance of bonus shares is not a big win for investors.

According to him, Nykaa was listed at more than double of its issue price around Rs 2205 during the listing and since then the share price has halved. Albeit, it is above the issue price but has still slumped by 41%. ITC on the other hand has increased by 41%. 

Emphasising on the pricing of both shares, Singhvi said that investors should decide at what price which share should be bought. The Market Guru added that things that look boring and are not liked by everyone sometimes have the biggest benefit. And that it is not easy to make money out of flashy and most talked about things. 

Further he said, bonus shares on the positioning end is a reward to the investors but also questioned its advantage for the investor. He said that bonus shares will increase the number of shares but the value will be halved.

He further emphasised on the fact that Nykaa should reward investors by dividend and that there is no benefit to the investor with bonus shares. Focusing on the profits made by Nykaa in FY 22 he said that the company’s profit has declined by almost 1/3rd compared to last year.