Nykaa profit falls upto 96%, prices of stocks down

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Founded in 2012 by Falguni Nayar, Naykaa is an Indian e-commerce company which has headquarters in Mumbai. Nykaa sells beauty products, along with wellness and fashion products via their website, mobile app and various stores. In 2020, it was valued at 85 billion rupees, making it the first Indian unicorn (privately held) startup. Its parent company is FSN E-Commerce Ventures Ltd, the shares of Nykaa fell on Monday before its Initial Public Offering (IPO). FSN E-Commerce Ventures Ltd, the parent company of Nykaa, saw its profit fall 96% due to the surge in the marketing costs in the quarter before its IPO offering. The net income plummeted from 27 crore rupees (previous year), to 1.2 crore in the quarter ended September this year. According to a statement released by the company this Sunday, the 47% gain in revenue was engulfed by a 92% increase in the total expenses. The shares of the company declined by as much as 7.3% in the early trade, and are down by 5.2% at ₹ 2,236.5 as on 10:07 a.m in Mumbai. Falguni Nayar who owns the majority of the shares in the company (53.5%) after the IPO, is now worth almost $7 billion and is India’s self-made, wealthiest female billionaire. Nykaa reported a profit of ₹ 1.2 crore this quarter after tax, which is comparatively low from last year profit which was ₹ 27 crore. Experts believe the less profit this year was due to a 4 times increase in marketing and advertising expenses of the company.

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