Nykaa Shares Plunge Following Block Deal Worth Rs 516 Crore Amounting To 2.7 Crore Shares

Nykaa, the beauty and wellness e-commerce giant, witnessed a 2.5% dip in its shares on Friday morning trade. This sudden drop was triggered by a massive exchange of nearly 2.7 crore shares, equivalent to 0.9% of the company's equity capital, in block deals totalling a substantial Rs 516 crore.

FSN E-Commerce Ventures Ltd, the parent company of Nykaa, experienced a rough start as its shares opened lower and hit a low of Rs 188.80 per share on the Bombay Stock Exchange (BSE). This represented a 2.54% loss compared to the previous closing price in morning trading sessions. The trading volume witnessed an unprecedented surge, skyrocketing by more than 41 times to 2.75 crore shares, a stark contrast to the two-week average volume of 6.6 lakh shares.

Market data revealed that the block deals took centre stage, with approximately 2.7 crore shares changing hands. The specifics of the average price in these deals, along with the identities of buyers and sellers, were not immediately available.

Nykaa had been enjoying a bullish run recently, reaching a 52-week high of Rs 195.40 per share on January 10. The surge marked a remarkable 23% increase over the past three months, reflecting the company's robust performance in the market.

In the financial sphere, the company reported a significant 50% surge in profits, rising from Rs 5.2 crore to Rs 7.8 crore in the July-September quarter compared to the same period the previous fiscal year. The consolidated revenue from operations also exhibited a healthy growth of 22.4%, climbing from Rs 1,230.82 crore in Q2FY23 to Rs 1,507 crore in Q2FY24.

Nykaa's expansion efforts were also evident during this period, as the company added 13 offline stores, bringing the total count to 165 as of September 30, 2023. This strategic move aimed at enhancing the brand's presence beyond the digital realm seemed to align with market trends.

Nykaa's shares were trading with cuts of nearly 3.5% as of 11:30 am on The National Stock Exchange (NSE). Over the last year, the stock has witnessed an impressive climb of almost 25%.

The reasons behind the sudden sell-off and the impact on Nykaa's long-term trajectory remain uncertain. Investors are keenly watching for further developments and insights into the identities of those behind the block deals.