Stock Market

Nykaa gave 78% return in one stroke, Rs 1125 share got listed at Rs 2001, now sell or stay

The stock of Nykaa has made a great entry in the market. The stock is listed on the stock exchange with a premium of 78 percent. The upper price band for the IPO was Rs 1125, while the listing took place at Rs 2001.

Nykaa Stock Market Listing: The stock of e-commerce beauty company Nykaa has entered the market with a bang. The stock is listed on the stock exchange with a premium of 78 percent. That is, the investors got 78 percent return in one stroke. The company had fixed the upper price band for IPO at Rs 1125. Whereas it is listed on BSE at a price of Rs.2001. The issue size was Rs 5352 crore. The investors of Nykaa’s IPO also got an overwhelming response and the issue was subscribed close to 82 times. For now, questions must be arising whether the stock should be kept after the listing gain or it should be sold. Anil Singhvi, Managing Editor of dgmartpro Business has given his opinion on this.

what investors to do

Anil Singhvi says that if you are a long term investor then keep hold, this stock can double your money soon. On the other hand, if there are short investors, then put a stop loss around Rs 1800. At the same time, if the stock price rises, then the stop loss should be trailed below Rs 100. He says that this is a new age business company, which people are liking. The growth of the company is very strong. Promoters have a good track record. Nykaa is a cash rich company and has become profitable. The recall value of the brand is good. The company has started spending on advertisements again. However, it is important to see the long-term track record of profits.

Investors gave great response

The IPO of e-commerce beauty company Nykaa got a great response from investors. It got subscribed 82 times overall. Under the Nykaa IPO, 75 per cent was reserved for Qualified Institutional Buyers (QIBs). This part filled up close to 92 times. Whereas 10 percent of the issue was reserved for retail investors. This part got filled about 12 times. At the same time 2.5 lakh equity shares have been reserved for the employees of the company. This part is 1.9 times full. The reserve portion for non-institutional buyers filled 110 times.

Where will the funds be used

Nayka will use the money raised from the IPO for expansion. Some of the money will be used to reduce debt and some will be used for marketing and promotion of new brands. Nykaa is one of the few new profitable etailers in India. The company had a profit of Rs 61.96 crore in the last financial year, while during the financial year 2019-20, the company had a loss of Rs 16.34 crore. In the financial year 2020-21, the revenue grew by 38 per cent year-on-year at Rs 2,453 crore. Falguni Nair founded FSN E-Commerce Ventures Limited in 2012. The company delivers lifestyle products, beauty, personal care and fashion products to the consumers.


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