Nykaa's parent firm, FSN E-Commerce Ventures, made a stellar debut on Dalal Street on Wednesday and this has pushed the Indian online beauty startup valuation at nearly $13 billion. Rahul Arora, CEO of Nirmal Bang Institutional Equities believes that profit booking for the lucky few who got shares allotted is not a good idea.
Nykaa shares listed at a premium of 79 percent compared with the issue price. On BSE, the stock began its journey in the secondary market at Rs 2,001 apiece with the issue price at Rs 1,125.
“You need to have moderate expectations. If you got an allotment – great. I do not see any reason to sell the stock, but if you are entering it today, make sure you have a very very long time horizon as the private equity investors would have in a name like this,” Arora advised.
Also Read: Nykaa listing: FSN E-Commerce hits Rs 1 lakh crore market value; surpasses Britannia, Godrej Consumer & BPCL
The stock looks expensive now that it is trading above Rs 2,000 apiece.
“It's a very expensive stock in the short-term. My simple advice would be to keep at least at the bare minimum of a 3-year view. If you don't have that you may be in for a bit of a disappointment because the stock is more than price to perfection and even the slightest disappointment in results could have you on the wrong side of the table,” said Arora.
“It’s a great company, a great franchise, but everything at a price is what we say in the capital markets. Hold on if you have got the allotment; be very calibrated in terms of return expectations if you are putting in money today,” he added.
For the entire interview, watch the video