Nykaa shares hit all-time low! Is there more pain ahead?

Amid global sell-off, the shares of Nykaa (listed as FSN E-Commerce Ventures Limited) crashed 13 per cent to hit an all-time low of Rs 1740.05 on BSE.
 
The market cap of the company slipped below Rs 85,000 crore. The stock has tanked over 32 per cent from its all-time high. It touched an all-time high of Rs 2,574 on November 26, 2021.
 
The stock listed at a premium of 79 per cent to the issue price, marking a strong listing for the online beauty retailer. The company made its market debut at Rs 2,001 per share on the BSE against the IPO issue price of Rs 1,125.
 
Abhay Agarwal, Founder, Piper Serica said that the sharp fall in Tech and Internet stocks globally is putting pressure on Indian Internet stocks also and the fall in the price of Nykaa is the result of that as it is a poster child of Indian e-commerce.
 
“The global investors are in a complete risk-off mood and it is exacerbated by the sharp fall in cryptos and nervousness around Fed meeting over the next couple of days. We believe that the stock of Nykaa will remain under pressure in the short term and opportunistic long-term investors should wait before bottom fishing,” he added.
 
“Taking cues from international markets, the domestic market is in a continuous downtrend. Most of the stocks are in correction mode. Nykaa may also see a further correction of 5-8% around Rs 1500 levels in the next trading sessions. Long-term investors may take fresh entry at lower levels for better gains,” Ravi Singh, Vice President and Head of Research-ShareIndia told BusinessToday.in.
 
“We are suggesting retail investors to not catch the falling knife at this point, we may see some more volatility as next week is going to be on budget i.e February 1, 2022. Markets are down on the back of global clues and not-so-good results by companies in Q3FY22 as of now,” said Mr. Yash Gupta- Equity Research Analyst, Angel One Ltd.
 
 FSN E-Commerce Ventures Ltd, which operates online beauty e-commerce platform Nykaa, reported over 95 per cent year-on-year (YoY) decline in consolidated net profit at Rs 1.2 crore for the July-September quarter as its expenses shot up. It had posted a profit of Rs 27 crore in the year-ago period.
 
The company’s revenue from operations rose 47 per cent year-on-year (YoY) to Rs 885.3 crore from Rs 603.8 crore in the corresponding quarter of last year.
 
The initial public offering (IPO) of Nykaa’s parent FSN E-Commerce Ventures Ltd was subscribed more than 82 times at the end of the final day of bidding on November 1.