TPG Capital to sell Nykaa shares worth ₹1,000 cr via block deal tomorrow

Market


American investment company TPG Capital is expected to sell 1,000 crore shares of FSN E-Commerce Ventures, which operates under the Nykaa brand, via a block deal on Friday, according to reports.

Citigroup is the banker to the deal, and TPG Capital is likely the seller in the block deal. The deal provides a discount of up to 0.5% from the going rate.

The development comes days after the lock-in expiry for pre-IPO investors in Nykaa came to an end. The lock-in period of the cosmetics-to-fashion retailer shares expired on 10 November. The promoters and investors cannot liquidate the pre-IPO securities held by them during the lock-in period.

Since the lock-in expiry, there have been multiple bulk deals in Nykaa.

On Thursday, shares of Nykaa closed 0.054% lower at 184.35 apiece from the previous day’s close on the BSE.

Why Nykaa shares are down nearly 20%

Shares of Nykaa have been under pressure since lock-up ended last week. The company’s shares fell 4% to 171 at day’s low, extending the four-day losses to around 20%.

As per data from the NSE, LIGHTHOUSE INDIA FUND III LIMITED sold 96,89,240 shares on 10 November at average price of 171 per share. Among other major sellers, SEGANTII INDIA MAURITIUS sold 33,73,243 shares at average price of 199 on 15th November.

Stocks often fall after lock-ups expire, as investor selling puts downward pressure on shares. Food-delivery platform Zomato had plunged to a record low in July when a lock-up on its shares expired.

Since Nykaa’s bumper market debut in November 2021, its shares have tumbled to drop below their IPO price.

In the July-September quarter, Nykaa had reported net profit of about 5 crore, helped by strong demand heading into the festive season. Revenue rose 39% to 1,231 crore.

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