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

Nykaa tanked more than 8 per cent on Wednesday, November 16, amid heavy sell-off as lock-in expiry comes into effect now. The stock opened at Rs 185 apiece on NSE, falling more than 3 per cent from previous close of Rs 192.05. The sell-off dragged the stock to touch day's low of Rs 177.60, tanking more than 7 per cent. At 11:43 AM, the counter quoted Rs 184.

Zee Business panellist and market expert Ambarish Baliga, said that more downside is expected in Nykaa and that the counter can test Rs 150 in the coming days. 

The slump in the stock price comes on a day when over 237 crore bonus shares of the company started trading on the exchanges. The FSN E-Commerce Ventures shares which have been listed as ‘Nykaa’ recently issued bonus shares in the ratio of 5:1.

As per his estimates an 18-20 per cent downside is open and the scrip could fall between Rs 160 and Rs 150, according to Ambarish Baliga.

He said that the one-year lock-in period of this stock ended on 10 November but investors were waiting for the listing of bonus shares. 

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Nykaa Share Price Movement

Nykaa, founded by Falguni Nayar in 2012, made its stock market debut on November 10 last year. The shares of the Mumbai-based company were listed on NSE and BSE at Rs 2001, a premium of 77.87 per cent. Nykaa IPO was subscribed 81.78 times and the price band was fixed at Rs 1,085-1,125 per share. 

Nykaa share price has tanked around 40 per cent in the past 6 months and 16 per cent in one month. Post listing, the stock hit a record high of Rs 2573.70 on NSE on November 26 last year. Thereafter the stock started correcting and hit a record low of Rs 975 on Friday, 28 October 2022, sliding below the IPO issue price of Rs 1,125. 

So far this year, Nykaa has corrected nearly 50 percent. At today's share price levels, Nykaa's market cap is at Rs 52,635.56 crore, as per the NSE. Over 2 crore shares were trading on the NSE around this time. 

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