ICICI Prudential Mutual Fund Acquires Major Stake in Nykaa

In a significant move, ICICI Prudential Mutual Fund acquired 1.5 crore shares of Nykaa on Wednesday, purchasing them at an average price of Rs 174.04 per share. This acquisition, valued at Rs 256 crore, was conducted through block deals on the NSE, with the shares being bought from the Canada Pension Plan Investment Board. As of the end of March, the Canadian fund held a 1.5% stake in Nykaa.

Breakdown of the Acquisition

The data from the block deals further reveals that ICICI Prudential Mutual Fund made this purchase under two of its schemes: the ICICI Prudential Technology Fund and the ICICI Prudential India Opportunities Fund. This acquisition will significantly reduce the Canada Pension Plan Investment Board’s holding in Nykaa to less than 1%. It’s worth noting that in November 2022, the Canadian fund had previously acquired 1.7 crore shares in Nykaa for Rs 299 crore, at an average price of Rs 175.25 per share.

Nykaa’s Stock Performance

Nykaa’s shares closed at Rs 175.28 per piece on Wednesday. The stock has been experiencing a decline over the last nine trading sessions, with only one session breaking the losing streak. Interestingly, shortly after its market debut, Nykaa’s shares hit a record high of Rs 428.95. However, since then, the stock has lost 58% of its value and is currently trading below its initial offer price.

Financial Performance and Outlook

Despite the recent decline in stock value, FSN E-Commerce Ventures, the parent company of Nykaa, reported a robust net profit growth of 67.5% for the year ending March 2024, reaching Rs 32.3 crore. The company’s revenues also saw a significant increase of 25%, totaling Rs 6,386 crore.

Looking ahead, for the first quarter of FY25, FSN E-Commerce Ventures expects to achieve a revenue growth of 22-23%. In an exchange filing, the company mentioned that the gross merchandise value growth for the June quarter is projected to be in the mid-twenties compared to the same quarter last year. The company also noted that its brick-and-mortar retail business faced challenges due to the elections and heat waves across North India.

Conclusion

The acquisition of Nykaa shares by ICICI Prudential Mutual Fund highlights the continued interest in the company despite recent stock performance challenges. With solid financial results and optimistic future projections, Nykaa remains a noteworthy player in the e-commerce sector.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.