Nykaa block deal: Founders offload shares worth Rs 1,200 crore; stock falls 4.5%
Shares of FSN E-Commerce Ventures, the parent firm of beauty and fashion retailer Nykaa, fell by up to 4.5 per cent on Thursday, hitting a low of Rs 202.25 on the
BSE
, after around six crore shares exchanged hands in a large block deal.
According to ET, this transaction accounted for roughly 2.3 per cent of the company's total equity.
The decline followed reports that early investors Harindarpal Singh Banga and Indra Banga were planning to offload part of their holdings through a secondary sale valued at nearly Rs 1,200 crore.
Term sheets issued ahead of the transaction indicated that around 60 million shares, or 2.1 per cent of Nykaa's equity, would be sold at a floor price of Rs 200 per share, reflecting a discount of approximately 5.5 per cent to the stock's closing price of Rs 211.59 on July 2.
The deal, entirely a secondary transaction, does not involve issuing new shares, meaning the proceeds will go directly to the selling shareholders. According to ET, global investment banks Goldman Sachs (India) Securities and JP Morgan India are overseeing the sale.
The trade is scheduled for execution on July 3, with settlement due the following day. A 45-day lock-in period has been placed on the sellers and their affiliates, barring any further share sales during this time.
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Retail investors will not be allowed to participate, and distribution in the US and Canada is limited to institutional investors under respective local regulations. Eligible buyers must also sign an investor representation letter as part of the process.
The final share price will be determined through a screen-based mechanism depending on investor demand. The order books are expected to close by 7:30 am on the day of the deal, and foreign portfolio investors (FPIs) may take part, provided there is regulatory space under Indian law.
This stake sale comes at a time when Nykaa is witnessing renewed interest from institutional investors amid signs of a gradual stock recovery. It also reflects a strategic monetisation by key shareholders as the company pushes to improve profitability.
As per PTI, Nykaa is targeting a break-even for its loss-making fashion segment by FY26, driven by improved marketing efficiency, higher own-brand sales, and overhead leverage.
The vertical reported a negative EBITDA margin of 8.3 per cent in FY25, despite generating Rs 3,800 crore in GMV.
In FY25, Nykaa's profit more than doubled to Rs 66.08 crore from Rs 32.26 crore the previous year. Revenue rose by 24.4 per cent to Rs 7,949.82 crore. The customer base also grew by 28 per cent year-on-year to over 42 million, while its total GMV reached Rs 15,604 crore.
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