Nykaa has announced a 1:5 bonus issue
The board of directors of FSN E-Commerce Ventures Ltd (Nykaa), an online retailer, announced bonus shares in the ratio of 5:1, or five bonus shares for every one share held. The business announced its plan to issue 2,37,27,61,850 equity shares to its stockholders, each with a face value of Rs. 1. The paid-up share capital as of the record date will be used to calculate the precise number of bonus equity shares to be issued. This would be the beauty and fashion e-first retailer’s bonus issue following its launch on the stock exchange on November 10, 2021.
Former investment banker Falguni Nayar launched the business in 2012. Nykaa, one of the top lifestyle-focused consumer technology platforms, is run by FSN E-Commerce Ventures. Nykaa and Nykaa Fashion are the two business divisions of the corporation. These include its own manufactured brand items as well as a comprehensive range of beauty, personal care, and fashion products. Through its website and mobile applications, Nykaa provides more than 4,000 brands and more than 3.1 million product SKUs, providing a thorough Omni channel e-commerce experience.
How do Bonus Shares work?
Bonus shares are additional, fully paid shares that the firm issues to its existing shareholders. A listed company often offers free bonus shares on its existing equity shares to current shareholders. They are issued by a listed corporation as a result of free reserves, excess, and the addition of new capital. However, the investment value is unchanged after bonus issuance Bonus issues have no effect on a company’s core competencies. Simply said, the price of a single share is changed to reflect the rise in the number of outstanding shares.
November 3 is the record date for determining the eligibility of shareholders to receive bonus shares. In order to qualify for Bonus Shares, Investors must be aware of the Ex-Bonus Date. One should buy the shares of a company’s stock at least one or two days before the ex-date in order to qualify for bonus shares
On November 10th, 2021, shares of FSN E-Commerce were listed on stock exchanges. It was listed for Rs 2001, with a premium of 77.87% more than its Rs 1125 issue price. The Nykaa IPO received 81.78 times its initial subscription. Nykaa shares have fallen around 43% since listing, while they have been down 35% in 2022 (YTD).
FSN E-Commerce Ventures (Nykaa) had a profit increase of more than 33% in the first quarter that ended June 30, 2022, from a profit of 3.4 crores to 4.5 crores (Q1 FY23).
- Revenue from operations rose to 41% year on year (YoY) to Rs 1,148.42 crore
- Its yearly consolidated revenue rose by 40%. (YoY) from $817 billion to $1,148 billion,
- During the quarter, Nykaa’s EBITDA grew 71% year over year to 46 crores,
- The EBITDA margin increased to 4% from 3.3%.
- The gross profit margin grew by 380 bps YoY between April and June.
- Gross merchandise volume (GMV) increased 47% from the same time in the previous year to 2,155.8 crores in the first quarter of FY23.
Impact on share price
Shares of Nykaa have fallen about 35% so far this year. At the beginning of the year i.e. on January 3, 2022, the company’s shares were trading at a level of Rs 2086.25. Shares of Nykaa are trading at a level of Rs 1304 on BSE on October 3, 2022. Shares of Nykaa have lost nearly 24% in the last 6 months. The company’s shares have fallen around 39% in the last one year. At the same time, the shares of Nykaa have gained 5% in the last 5 days.
The formulation and implementation of the Employee Stock Option Plan 2022 (‘ESOP 2022’) to give stock options to eligible employees of the firm were also announced at the same time. The company’s shares increased by more than 11% intraday on Monday.