0

0

0

0

0

0

0

0

0

This article is more than 2 month old.

As Nykaa shares make blockbuster debut, analysts upbeat on stock, see targets up to Rs 2,600

Mini

After Nykaa shares made a blockbuster debut in the secondary market, analysts have given target prices to the tune of Rs 2,600. Most of them suggest existing investors hold the Nykaa stock for the long term.

As Nykaa shares make blockbuster debut, analysts upbeat on stock, see targets up to Rs 2,600
It was a big day for Nykaa on Wednesday as FSN E-Commerce Ventures shares hit the secondary market with a huge premium over the issue price. Nykaa shares extended gains after debuting on stock exchanges at premiums of up to 79 percent. FSN E-Commerce Ventures runs the online marketplace for beauty and wellness products, Nykaa.
Nykaa shares debuted at Rs 2,001 on BSE, a premium of 77.9 percent over the issue price, and Rs 2,018 on NSE, a premium of 79.4 percent. The hefty premium for Nykaa shares comes its IPO - which ended on November 1 - received a robust response from investors.
ALSO READ
The company touched a market capitalisation of Rs 1 lakh crore at the debut, surpassing the likes of Britannia, Godrej Consumer, Bharat Petroleum, InterGlobe and Dr Reddy's. 
Most analysts are positive on Nykaa shares from a long-term perspective, with targets as high as Rs 2,600.
Here's how the Street is reading Nykaa shares after their blockbuster debut:
Sneha Poddar, AVP Retail Research, Motilal Oswal Financial Services:
“Nykaa’s key strengths lie in its inventory-led business model for the BPC segment, which allows it to offer authentication for all its products and ensure availability and efficient distribution. The online BPC market in India is highly underpenetrated at just 8 percent, and growing at a very fast pace (60 percent p.a. over CY16-20). Given Nykaa's 35 percent market share in online BPC, we believe Nykaa is rightly placed to tap the high growth digital/online penetration in BPC/Fashion market."
"We like Nykaa given its leadership position in online BPC market, customer-centric approach, profitable tech platform and capital-efficient business model.”
Santosh Meena, Head of Research, Swastika Investmart:
"Nykaa has strong fundamentals. It is among the few profitable new-age businesses. It is a high-growth company and into the right business, where it may continue to grow in double digits for many years."
"We are expecting the upside momentum to continue for at least 1-2 days before the stock stabilises for some time because the valuation could be a concern after the big listing gain. However, the Rs 2,000 level could act as support in the near term. It may head towards Rs 2,100/2,200 levels even after the big opening."
Those who participated in the IPO for a listing gain can keep a stop loss at Rs 1,950. Aggressive investors are advised to hold this stock for the long term because it is one of the few stocks in new-age companies to own. It is difficult to buy after the big gain at the opening however fresh investors can accumulate in parts... Any correction towards Rs 1,800 can be used to add more."
Rahul Sharma, Co-Founder, Equity99:
"We are bullish on Nykaa shares and see them as a good bet for the long term. Investors might book some quantity considering the bumper listing premium and keep the remaining shares for the long term. Anyone who wishes to enter afresh should wait for declines to near Rs 1,900-1,850 levels, for a target of Rs 2,600 with a stop loss at Rs 1,650.
Manoj Dalmia, Founder and Director, Proficient Equities:
"Nykaa's IPO was subscribed nearly 91.18 times in the QIB category and 112 times by non-institutional investors. There is a big chance that these entities will be chasing the IPO to get shares allotted, and, hence, drive the price higher."
"The future scope of Nykaa appears to be good. Investors should hold Nykaa shares."
Ravi Singh, Head of Research and Vice President, ShareIndia:
"We advise investors to cover their 50 percent position at the current premium and hold the rest with a closing stop loss at Rs 1,850 for a target of Rs 2,500. Nykaa has strong fundamentals, so investors may hold their positions for a longer period."
next story