Nykaa shares hit a series of record lows. Is there a bounceback in the making?

Nykaa shares hit yet another record low on Wednesday, falling for the fifth session in a row. The stock of FSN E-Commerce Ventures -- the parent company of cosmetics-to-fashion retailer Nykaa -- fell by as much as Rs 10 or 7.5 per cent to hit an all-time low of Rs 123.3 apiece on BSE, taking its losses to more than 18 per cent in five days. 

Sustained weakness in Nykaa shares follows the news of a block deal worth Rs 212 crore ($26 million) executed on January 11, 2023, at a price of Rs 148 apiece.

At the latest record low, Nykaa shares changed hands at a discount of 88.6 per cent to the lower end of its issue price. 

Also Read: Nykaa shares hit record low. Is it an opportunity for you to buy?

Nykaa shares: Past performance 

The Nykaa stock has shed more than 68 per cent of its value since the company's listing on the bourses. 

Nykaa's IPO concluded in November 2021 with an overall subscription of 81.8 times the shares on offer.

Is there an opportunity for investors?

Also Read: Nykaa shares hit fresh lifetime low amid slew of bulk, block deals

The December quarter saw a technical correction for Nykaa shares due to the expiry of the lock-in period with the valuation continuing to be at the lower end of the range despite only 12-15 per cent of pre-IPO shares being sold, according to JM Financial Research Analyst Swapnil Potdukhe.

While supply could still be an overhang, the analyst believes that the downside in Nykaa shares is limited, and a robust set of quarterly results could trigger a gradual uptick.

Anil Singhvi's view on Nykaa shares 

Also Read: Why are Zomato, Policy Bazaar and Nykaa stocks to Hold? Managing Editor Anil Singhvi explains

Investors owning stocks of new-age companies such as Nykaa should hold on and avoid selling them at just about any price, Zee Business Managing Editor Anil Singhvi said recently.

"A lot of times, when you are unable to sell at the right price, you must not look to sell it at any price that comes your way," he said.