Last month Nykaa-founder Falguni Nayar was named India’s richest self-made woman by the IIFL Wealth Hurun list, with a Rs 38,700 crore net worth. But since then the stocks of her e-commerce behemoth have plummeted by 24 per cent in a month, wiping off Rs 8,300 crore from her fortune. The fall of Nykaa has come after a bumper debut on the stock market last year, when it delivered 80 per cent returns to investors.
Sell-off triggers fall before lock-in period ends
The 59-year-old, who had founded Nykaa only a decade back, has lost the massive amount of wealth in just 15 days. The reason behind this crash in the company’s stock prices is the sell-off triggered at a time when the year-long lock-in period for pre-IPO investors is coming to an end. Another factor responsible for the pushing Nykaa’s stocks below their listing price, is the global crisis that has hit tech stocks, after big players such as Meta and Google reported lower profits.
Investors hit hard after initial euphoria
On the other hand, investors who had bagged the stock for Rs 1,125 during the IPO, after which its had almost doubled in value, have now been hit by a 13 per cent loss. The past couple of weeks have brought the deam run of the online cosmetics and apparel seller to a screeching halt. Following the carnage in the markets, Nykaa has also delayed issuing bonus shares from November 5 to November 11 2022. According to its 5:1 bonus share promise, stakeholders are supposed to get five shares for every one share they currently own.
For the June quarter, Nykaa had posted a 33 per cent increase in consolidated profits, and the firm is also spending Rs 100 crore to expand its offline footprint. By 2024, Nayar’s firm is aiming to set up 180 brick and mortar stores across the country.