Following the announcement of the 5:1 bonus shares, the share price of Nykaa increased by 11%.
According to information provided to stock markets by the company, the board of FSN E-Commerce Ventures, the parent company of the e-commerce brand Nykaa, has decided to grant shareholders five bonus shares for each share they now own.
The stock increased by almost 8% to trade at Rs 1,370.65 over the previous closing of Rs 1,273.80 as a result of this development. The year-to-date performance of Nykaa shares has decreased by more than 34.24 per cent.
According to the corporation, bonus shares will be issued using funds from the Securities Premium Account that will be available as of March 31, 2022. Bonus shares are extra, fully paid shares that a corporation issues to its current owners. The paid-up share capital as of the record date will be used to establish the precise number of bonus equity shares to be issued as well as the post-bonus issue share capital, the company stated.
Falguni Nayar launched the Indian e-commerce business Nykaa in 2012, and it has its headquarters in Mumbai. More than 100 physical businesses and online sell products for beauty, wellness, and fashion. It became the first unicorn firm in India to have a female CEO in 2020.
Nykaa offers both domestically and internationally produced goods for sale. The company switched from an online-only to an omnichannel business model in 2015 and started selling items other than cosmetics. By 2020, it will sell 200,000 products from over 2,000 brands on all of its channels.
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 the intense demand from institutional investors.
What are Bonus Shares?
Depending on how many shares a shareholder has, bonus shares are extra shares that are handed to them without incurring any further costs. These are the accumulated profits of a corporation that are turned into free shares rather than being distributed as dividends.
The fundamental idea underlying bonus shares is that the number of shares outstanding increases proportionately to the number of shares held, maintaining a constant ratio.
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