Stock rises 8% as Nykaa board approves issuing 5:1 bonus shares

• ByStartupStory     |    October 3, 2022

In a statement to the stock exchanges, FSN E-Commerce Ventures, the parent company of the e-commerce brand Nykaa, stated that its board has decided to grant shareholders five bonus shares for every share they now own. In response to this news, the stock increased by about 8% to trade at Rs. 1,370.65, up from its previous closing of Rs. 1,273.80. The price of Nykaa shares has decreased by almost 34.24 per cent so far in 2022.

Bonus shares are additional, fully paid shares that the firm issues to its existing owners. A listed firm typically offers free bonus shares on its existing equity shares to current shareholders. Bonus shares are issued by a listed corporation as a result of free reserves, surplus, and the addition of new capital. After the bonus issue, the face value is unchanged.

Investors must be aware of the Ex-Bonus Date in order to qualify for Bonus Shares. An investor should purchase shares of a company’s stock at least one or two days before the ex-date in order to qualify for bonus shares. The T+1 and T+2 settlement cycles are to blame for this.

The board of Nykaa stated that the share offering would be approved by shareholders via postal poll and other means. The record date for deciding whether members are eligible for the bonus equity shares was set on November 3.

“We hereby inform you that the Board has approved the bonus issue of equity shares in the ratio of 5 (Five) fully paid-up equity shares of Re 1 each for every 1 (One) fully paid-up equity share of Re 1 each held by the shareholders of the company as of the record date, subject to shareholders’ approval by way of postal ballot,” Nykaa stated in an exchange filing.

The corporation said that the bonus shares will be issued using the Securities Premium Account that will be open as of March 31, 2022. Bonus shares are extra shares that have been issued by a corporation to its current shareholders and are fully paid. The number of bonus equity shares that will be issued and post bonuses. The paid-up share capital as of the record date will be used to establish the actual number of bonus equity shares to be issued and post bonus issue share capital, the company stated.

The anticipated date by which such bonus shares would be credited/dispatched would be on or before December 02, 2022, which is two months after the date of board approval. Falguni Nayar, a former investment banker who launched Nykaa in 2012, has a wide range of products in the fashion, beauty, and personal care categories. In November of last year, the company’s shares were listed on the BSE and NSE stock exchanges.

On the final day of subscriptions, which ended on November 1, 2022, Nykaa’s initial public offering (IPO) was subscribed 81.78 times, largely due to intense demand from institutional investors.

Follow Startup Story