Insiders at FSN E-Commerce Ventures, the operator of e-commerce beauty goods giant Nykaa, sold stocks for $19 million (about Rs 139 crore) last week, according to BSE data.
Insiders, many of whom are Nykaa’s senior brass, sold 984,528 shares at an average price of Rs 1,424 per share, a 27 percent premium over the company’s initial public offering price of Rs 1,125 per share. Arvind Agarwal, Chief Financial Officer, Sanjay Suri, CEO of private label cosmetic businesses Reena Chhabra, CEO NykaaMan Nihir Parikh, and Vice President Neha Grover are among the vendors.
Agarwal, Suri, Chhabra, Parikh, and Grover still own 0.05-0.38 percent of the corporation, to be sure. As part of Nykaa’s employee stock option programme, the company’s top management has been given equity shares in the company.
Members of Nykaa’s top management have reduced their holdings in the midst of a severe drop in the stock. After soaring more than 100 percent from its IPO price, Nykaa’s stock has plunged about 48% from its record highs set in November. The Nifty 50 index has only dropped 6-7 percent in the same time frame.
Nykaa’s initial public offering (IPO), which began in late October 2021, was a success, with the issue being subscribed 82 times, with high-net-worth individuals subscribing 112 times. The stock had debuted at a premium of 79 percent to its issue price on the stock exchanges.
The stock has been on a downward spiral since its IPO month, as investors questioned the company’s wealthy valuation amid hints that global interest rates were going to climb significantly.
High interest rates make companies like Nykaa less appealing to investors since the net present value of their income falls substantially even if interest rates rise only slightly. Furthermore, Nykaa’s December quarter earnings were dismal, with a 59 percent drop in net profit year over year due to greater expenses.
