Shares of FSN E-Commerce Ventures, the parent of cosmetics-to-fashion retailer Nykaa, have fallen significantly over the past few sessions, falling below the issue price of their initial public offering (IPO). 1,125, before the end of November 10 of the one-year lock-in period for its pre-IPO shareholders.
“With the lock-in set for the pre-IPO shareholders set to expire on November 10, 2022, it will be important to see whether these investors liquidate or continue for further gains. While Nykaa is certainly a different game, the fact that 12%+ shareholding is sitting at 100x returns may be reason enough for these investors to diversify their portfolios that could exceed Nykaa. We also note that most of these investors generated liquidity during the OFS and secondary sales prior to the IPO. Further, 70% of the share capital that is being unlocked is related to patient capital such as HNIs and family offices, which may not be obliged to sell due to the tenure of the funds,” JMFinancial said in a note.
The brokerage house has a ‘Buy’ rating on the stock with a target price of 1,780 and believes that any short-term decline “should be a great accumulation opportunity for investors looking to build long-term positions in Hero.”
nayka share Listed in November last year, the stock has lost over 58% since its market debut. New age tech stocks including Paytm, Zomato, Nykaa, PB Fintech, Delhivery among other new age tech stocks, which went public recently, have had tough months in the stock market so far and have already fallen below their respective issue prices.
“The counter is witnessing a vertical decline after breaking the key 1220 support. One should not catch a falling knife so investors should stay away from this counter. Those who already hold this counter can book losses and look for other opportunities, but if one wants to take a risk, there will be a stop loss for 920 existing positions.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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