Why FSN E-Commerce Ventures, parent of Nykaa, shares gain 4% in trade?

FSN E-Commerce Ventures, parent company of Nykaa, shares have gained 3.8 per cent in Wednesday's trade and logged an intraday high at Rs 174.45 per share on BSE. The stock was in demand after the company finished acquisition of Earth Rhythm Private Ltd (ERPL). 

 

Around 10:44 AM, Nykaa's share price was up 1.28 per cent at Rs 170.15 per share on BSE. In comparison, the BSE Sensex was down 0.07 per cent at 79,948.13. The market capitalisation of the company stood at Rs 48,536.10 crore. 

 

As per the filing, on August 13, 2024, the company's board approved further investments in ERPL through primary and secondary rounds, in one or more tranches, resulting in ERPL becoming a subsidiary of Nykaa.

 

The company completed the transaction by subscribing 4,071 series A optionally convertible redeemable preference shares (Series A OCRPS) having a face value of Rs 10 each of ERPL, as the first tranche, as was said in the share subscription and shareholders agreement (SSHA). Further, the company acquired 12,226 share warrants of ERPL, as per terms of the SSHA 3. 

 

Additionally, the secondary acquisition of 8,151 seed compulsorily convertible cumulative preference shares (Seed CCCPS) from certain existing shareholders of ERPL was done as per terms of the SPA 4, and secondary acquisition of 3,952 Series A CCCPS was carried out from certain existing shareholders of ERPL, as per terms of the share purchase agreement. 

 

After this transaction, ERPL is now the subsidiary of Nykaa.

 

ERPL is an Indian company focusing on creating natural and sustainable skincare products. The brand is recognized for its commitment to clean beauty, which means using ingredients that are non-toxic, cruelty-free, and often vegan. Earth Rhythm aims to create effective beauty and personal care products by blending science with nature, offering items that cater to various skin types and concerns, such as anti-aging, hydration, and sensitive skin.

 

The company offers a wide range of products, including cleansers, moisturizers, serums, oils, sunscreens, and hair care items. Earth Rhythm prides itself on transparency, with a focus on providing clear information about the ingredients used in their formulations. Their products are free from harmful chemicals like parabens, sulfates, and synthetic fragrances, which makes them appealing to consumers looking for clean and eco-friendly beauty solutions.

 

In the past one year, Nykaa shares have gained 0.85 per cent against Sensex's rise of 20.8 per cent.