Nykaa parent FSN E-Commerce Ventures allots 4.73 lakh shares under ESOP

On June 14, FSN E-Commerce Ventures, the parent company of Nykaa, announced the allotment of 4.73 lakh equity shares under its employee stock option plan (ESOP). 

The value of these newly allotted shares is approximately Rs 8.08 crore, based on Nykaa's closing price of Rs 170.95 on the BSE as of June 13.

The move follows a previous allotment of 4.05 lakh shares under the ESOP scheme on May 20.

Why ESOPs?

Employee stock options are a key part of remuneration for Nykaa employees. These options are designed to attract and retain top talent, align employees' interests with those of the shareholders, and boost overall company performance. 

By granting stock options, employees can benefit from the company's growth, as their income increases with the company's valuation. Nykaa's exchange filing stated, "equity shares so allotted, shall rank pari-passu with the existing equity shares of the Company in all respects."

Nykaa financial performance

For the quarter ending March 2024, Nykaa reported a substantial increase in its consolidated net profit, which jumped 187% to Rs 6.9 crore from Rs 2.4 crore in the same period last year.

The company's revenue from operations for this quarter rose 28% year-on-year to Rs 1,668 crore.

Furthermore, FSN E-Commerce Ventures posted a 67% rise in its annual consolidated net profit to Rs 32.2 crore for the year ended March 31, 2024. The company also saw a 24% year-on-year revenue growth, reaching Rs 6,385 crore.

Recent leadership developments

The development comes Nykaa's Board has recently approved the reappointment of Pradeep Parameswaran and Seshashayee Sridhara as independent directors for a second term of three years.

Additionally, the Board approved the appointment of Santosh Desai as an independent director for a three-year term starting July 15, 2024. These decisions are part of Nykaa's efforts to strengthen its governance and leadership team as it continues to expand.

Nykaa is facing stiff competition from Reliance-backed Tira. In response, the company is ramping up its fashion and international distribution strategies. During its fourth-quarter earnings report, Nykaa announced an investment of Rs 20 crore in FSN International.

The company also plans to invest up to $1.9 million through FSN International in Nyssa International, its omnichannel beauty platform based in the Gulf Cooperation Council (GCC) region.