Nykaa cools off after stellar debut; what should investors do – time to buy or book profits?

FSN Ecommerce Ventures, the parent of e-commerce beauty giant Nykaa, cooled off from highs after making a stellar stock market debut on Wednesday.

Shares of Nykaa fell over 3 per cent in the morning trade on Thursday, but it managed to hold above the market capitalization of Rs 1 lakh crore mark as of 10:30 AM (IST).

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On a listing day, shares of Nykaa which opened at a premium of 79 per cent at Rs 2,018 per share on the NSE as against the issue price of Rs 1,125 per share, shot up 96 percent to close at Rs 2,205.80.

FSN E-Commerce or Nykaa remains an attractive buy for investors despite strong listing day gains and any dips towards 1800 levels can be used by retail investors to put fresh money for the long term, suggest experts.

“We advise investors to cover their 50% position at a current premium and rest hold with a closing stop loss of Rs 1850 for the target of Rs 2500. Nykaa has a strong fundamental, so investors may hold their position for a longer period,” Dr. Ravi Singh, Head of Research & Vice President, ShareIndia, said.

Nykaa's initial public offering (IPO) was subscribed 82 times on the last of the subscription on November 1, 2021. Of 2,64,85,479 shares on sale, bidding for whooping 2,16,58,63,836 shares or 81.78 times were made on the final day of the subscription.  

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Nykaa, the largest specialty beauty and personal care (BPC) Platform in India. It is the first of its kind listing in the e-commerce space and thus garnered a lot of interest, validated from an IPO subscription of 82x.

It is among the few profitable new edge businesses which is profitable, highlight experts. The fundamentals remain strong as it may continue to grow in double digits for many years.

“Nykaa is a consumer technology platform, delivering a content-led, lifestyle retail experience to consumers. The company has a diverse portfolio of beauty, personal care and fashion products, including their own brand products manufactured by them,” Rahul Sharma, Co-Founder, Equity99, said.

“It is among one of few profitable start-ups. We take Nykaa as portfolio stock and advise adding this counter on every dip,” he added.

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)