November 30, 2022
The Board of Directors of Nykaa To Consider Issuing bonus Shares

The Board of Directors of Nykaa To Consider Issuing bonus Shares

Nykaa’s parent company, FSN E-Commerce Ventures, told stock exchanges on September 28 in a regulatory filing that a meeting of its board of directors is planned on October 3 to review and authorise the issuance of bonus shares to shareholders.

The board may request shareholder approval for the share offering by a postal poll and other means.

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

On September 27, Nykaa made headlines for collaborating with the Indian Institute of Management Ahmedabad (IIMA) to develop the ‘Nykaa Chair in Consumer Technology.’ The company intends to use this to produce consumer technology research solutions.

The announcement is made while the listed beauty ecommerce site is still suffering from the adverse market situation. The past month has seen a decline in the price of Nykaa’s shares. The stock dropped 8% from INR 1,391.35 on August 30 to INR 1,277.35 on Wednesday.

The decrease in Nykaa’s share prices since a record high of INR 2,574 in November has burned out more than 53% of investor value in the last year. Tightening monetary policies and unpredictable market sentiment have complicated matters for the company.

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In the first quarter (Q1) of the fiscal year 2022-23, the report showed a 42% year-on-year (YoY) increase in consolidated net profit to INR 5 Cr (FY23).

Net earnings declined 33% year on year from the previous March quarter. Revenue from operations increased 41% year on year to INR 1,148.4 Cr in the first quarter of FY23.

Gross merchandise volume (GMV) increased 47% year on year to INR 2,155.8 Cr, while total expenses increased more than 40% yearly to INR 1,148.4 Cr.

According to the startup’s quarterly report released last month, high inflation, a greater propensity to save, and a decline in discretionary spending are the key difficulties that Nykaa faces.

According to the startup’s quarterly report released last month, high inflation, a greater propensity to save, and a decline in discretionary spending are the key difficulties that Nykaa faces.

The startup, on the other hand, keeps making strategic investments. The listed unicorn completed an all-cash acquisition of digital content publisher Little Black Book earlier this month.

It also seems to be expanding its operations and footprint across the country. It opened eight additional stores in Q1 FY23, bringing the total number of retail stores to 113 across 52 cities at the end of June.

According to a survey published earlier this month, Nykaa founder and CEO Falguni Nayar were named India’s richest self-made woman. Nayar is believed to have a net worth of INR 38,700 Cr due to Nykaa’s successful stock exchange listing last year.

Purplle, Plum, MyGlam, and other startups compete with the startup. According to Inc42, the online beauty and personal care sector will be worth $5.6 billion by 2025.

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