- Date : 01/11/2022
- Read: 4 mins
Nykaa shares were a popular choice for investors in the past as it became to be one of India’s biggest e-commerce companies. Recent events have led to a sharp fall in the share price of Nykaa causing investors to be confused about whether to sell or buy.
Nykaa is one of the most successful start-ups in the country within the last few years. Investors poured in when Nykaa decided to list its shares in the financial market. However, investors holding Nykaa shares have found themselves scratching their heads while deciding to sell or to keep holding the shares.
Nykaa Shares: Background
Nykaa is a giant in the beauty, fashion, and wellness industry Nykaa is one of the biggest e-commerce platforms in India. Founded by Falguni Nayar in 2012 it provides customers with more than 1000 brands and 1,00,000 products.
The company decided to list its shares in the financial market on November 10, 2021. With a listing price of Rs 1125, Nykaa shares were bought by various investors across the country.
Also read: Nykaa share price below IPO price
Nykaa Shares: The Downfall
Nykaa Shares have experienced a tremendous downfall in recent weeks which has led to confusion among investors about holding the shares. Nykaa shares have hit an all-time low of Rs 1061 in the past week. The current share price of the company is lower than the past moving averages of 5,20,50,100 and 200 days. The primary reasons behind this downfall of the share prices are:
- Announcement of bonus issue - The company recently announced a maiden issue for the investors which stated that every investor holding one share will get five shares as a bonus. This announcement was not well received by the investors which led to the selling of the shares in the financial market.
- Expiration of the mandatory lock-in period for the anchor investors - The company is close to the expiration of the mandatory lock-in period for the anchor investors in November. The sudden selling of the shares by anchor investors has contributed to the decline in share prices.
- Inflation - Inflation across the world has hit various industries, such circumstances make investor confidence in the performance of the company a bit shaky. Thus, inflation has led to lower share prices in the past few months.
Nykaa Shares: Expert Advice
With the sharp decline in the share prices of Nykaa investors are now looking towards experts to share their opinions on holding or selling Nykaa Shares. Let us look at the opinion of different experts:
- Tirthankar Das (Ashika Stock Broking) - Das believes that the trend of prices for the Nykaa Shares is negative, and overselling has led to the prices declining further. He believes that the shareowners must wait for a rise and then sell the shares to cut losses.
- Kotak Institutional Equities - A note from the company said that the company is going to do well in the future and make profits. The reduction in share prices is an opportunity to buy more for the shareowners.
- Nomura Brockage - The foreign brokerage firm believes that the company will grow progressively leading to a doubling of the share price within the next five years.
- Pravesh Gour (Swastika Investmart) - Pravesh believes that the fall in prices beyond 1220 has resulted in a loss of key support for the shares. The shareowners must look to sell and limit their losses.
The opinion of experts on Nykaa Shares is divided in terms of holding and selling. If an investor is looking for short-term profits on Nykaa shares, then the best thing is to sell the shares to avoid losses. However, if the share owner is comfortable holding the shares for a long period, then there is a probability that the price will return to its original position over the years.
Trading securities in the financial market always involves risks. The investors holding Nykaa shares should consider their commitment to the shares and the risks that they can entertain while deciding. Holding or selling the shares depends upon the strategy implemented by the investor.
The content is intended to be used and must be used for informational purposes only. It is important to do your research before making any investment.