Nykaa stock falls 4% as Lighthouse offloads 1.8 crore shares via block deal

Nykaa shares fell over 4 per cent on NSE on news of block deal and were trading at Rs 175.95. Lighthouse India, which held 2.04 per cent stake in the company, today sold around 1.8 crore shares in the company. The stock is still trading at a high PE multiple of 100.

After the end of lock-in period on November 10, 67 per cent holding got open for trading. 

See Graphic 

The selling has come after TPG and Lighthouse India Fund reduced their stakes from combined ownership of 5 per cent in FSN E-Commerce Ventures   

Read More: Nykaa sell-off continues on bonus shares' listing, stock tanks 8%; analyst says more downside likely 

Market expert Avinash Gorakshkar advises against making any fresh move in this stock expecting a further downfall in it.  

Read More: Stock Market Today LIVE: Sensex up 200 points, Nifty 60 points higher; Indusind Bank, Divi's top gainers

He said that the earnings on Rs 247 cr equity will only be 25-30 paise so this is not the company which will give earnings growth now, he further said. He said that any rerating in this stock is highly unlikely. 

He also called Nykaa’s decision of giving 5 bonus shares for every share that investors hold as a wrong one. 

He, however said that the business is quite good and how much of that will translate into earnings growth is uncertain. He said that the potential of beauty business is strong. 

He recommends an ‘Avoid’ in this stock. 

He said that the bonus shares which have been given to investors will reflect in demat accounts in a month’s time and so there could be more selling pressure. He said that shares may fall over the next one month.   

On Tuesday the stock was trading in large volumes amid high selling pressure with over 2.5 cr shares on the block. 

Nykaa Price Movement

The stock is off its 52-week high highs of Rs 428.95. The stock hit its 52-week lows of Rs 162.50 and appreciated from the lows.