Nykaa Board To Consider To Issue Bonus Shares For Retail Investors

The beauty ecommerce Nykaa is considering issuing bonus shares at its ‘board of directors’ meeting. Nykaa reported a 42% YoY growth but a 8% drop in the last month.

Nykaa, a startup in the beauty e-commerce industry, said on September 29 that its board will meet on October 3 to discuss the offering of bonus shares.

Bonus shares are extra shares that a corporation issues based on the current shares that a shareholder already owns.

The announcement is made while the listed beauty ecommerce site is still suffering from the unfavorable market mood. 

The past month has seen a decline in the price of Nykaa’s shares. The stock dropped 8% from ₹ 1,391.35 on August 30 to ₹ 1,277.35 on Wednesday.

More than 53% of investor wealth has been lost as a result of the decrease in Nykaa’s share prices since they reached a record high of INR 2,574 back in November. 

Rigid financial regulations and erratic market sentiment have made it more difficult for the business.

In the first quarter (Q1) of the fiscal year 2022–23, the company recorded a 42% year-over-year (YoY) increase in its consolidated net profit, which reached INR 5 Cr (FY23).

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Net earnings decreased 33% from the March quarter the year before on a quarterly basis. In Q1 FY23, revenue from operations increased 41% year over year to INR 1,148.4 Cr.

During the quarter, overall expenses increased by more than 40% YoY to ₹ 1,148.4 Cr, while gross merchandise volume (GMV) increased by 47% YoY to ₹ 2,155.8 Cr.

The three biggest issues Nykaa has are rising prices, an increasing propensity to save, and a decline in discretionary spending, according to the startup’s quarterly report released last month.

The startup nonetheless keeps making wise investments. The listed beauty ecommerce unicorn completed the all-cash acquisition of the digital content provider Little Black Book earlier this month.

Additionally, it seems to be expanding its activities and footprint across the nation. At the end of June, it had 113 physical stores spread throughout 52 cities, thanks to the addition of 8 additional stores in Q1 FY23.

The CEO and founder of Nykaa, Falguni Nayar, was named the richest self-made woman in India earlier this month, according to a report. 

On the strength of Nykaa’s successful stock exchange listing last year, Nayar is believed to have a net worth of ₹ 38,700 Cr.

The firm faces competition from companies like Purplle, Plum, MyGlam, and numerous more. Research projects that by 2025, the internet industry for personal care and cosmetic products would be worth $5.6 billion.