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Tag: Nykaa ESOP

  • Nykaa Under ESOP Allots Shares Worth INR 32 Lakh

    Nykaa, a significant player in the beauty and fashion industry, has distributed 17,010 equity shares through its employee stock option plans (ESOP). The company stated in an exchange filing on 21 April that the equity shares were distributed in accordance with the employees’ execution of vested stock options under ESOP programmes. The allotment is valued at more than INR 32.3 lakh based on Nykaa’s starting price of INR 190 per share.

    Financial Outlook and Ongoing Developments at Nykaa

    Nihir Parikh, the CEO of Nykaa Fashion, resigned in December 2024, citing personal obligations, marking another high-level departure from the company. In terms of finances, Nykaa’s consolidated net profit increased 51% from INR 17.5 Cr in the same period last year to INR 26.4 Cr in Q3 FY25. Operational revenue increased 26.7% from INR 1,788.8 Cr in Q3 FY24 to INR 2,267.2 Cr in the reviewed quarter. Broker JM Financial kept its “BUY” recommendation on the stock due to the company’s good quarterly performance, pointing to its capacity to generate high growth in an environment of low demand. In the meanwhile, Bernstein kept its “market-perform” rating on the company, although anticipating that the margin will progressively grow as a result of ongoing investments and an improvement in profitability in its B2B and fashion divisions. Nykaa has also been working on offering 10-minute delivery on a few cities’ SKUs in response to the growing popularity of rapid commerce.

    In March, 1.01 Lakh Equity Shares were Allotted in Another ESOP

    In March 2025, Nykaa had distributed 101,350 equity shares through its employee stock option plans (ESOP). According to the filing, the equity shares that were so assigned will rank on an equal footing with the company’s current equity shares in every way. This comes three weeks after 90,500 equity shares were distributed under ESOP plans by the company led by Falguni Nayar. It had already distributed 56,750 stock shares in January.

    Current ESOP Scenario in India

    According to a 2024 survey of 160 companies, 78% of them offered employee stock option plans (ESOPs) to their staff, a considerable increase from 59% in 2021. This indicates that ESOPs are becoming more and more popular among startup owners. More firms are now offering ESOPs to all employees, not only senior management, according to a survey done by Saison Capital, XA Network, and Carta. Compared to one in four in 2021, one in three firms now provides these plans to all employees.

    Furthermore, the median ESOP pool size grew from 9% in 2021 to 12.6% in 2024, and 90% of founders now talk about ESOPs with candidates during interviews or job offers, up from 75% in 2021. Additionally, the reasons for providing ESOPs have changed; in 2024, 40% of founders cited cost reductions, up from 28% in 2021.

  • 90.5K Shares Allotted by Nykaa Under the ESOP Scheme

    90,500 equity shares have been distributed by omnichannel cosmetics retailer Nykaa as part of its employee stock option plan (ESOP). Nykaa stated in an exchange filing that the equity shares are allocated following the execution of vested stock options by employees under the company’s ESOP Plan. The filing indicated that the allotted equity shares shall rank equally with the existing equity shares of the company in all respects.

    Financial Outlook of Nykaa

    Nykaa‘s consolidated net profit increased by 51% to INR 26.4 crore in the third quarter of the financial year 2024-25 (Q3 FY25), up from INR 17.5 crore in the same time last year, driven by robust development in the beauty and fashion sectors. The corporation disclosed its financial results for the quarter ending in December earlier this month. On a quarter-on-quarter basis, net profit increased by 104% from INR 12.97 crore.

    Following its impressive performance in the reviewed quarter, broking firm JM Financial maintained its ‘BUY’ recommendation on the stock, setting a target price (TP) of INR 240, due to the company’s capacity to achieve substantial growth in a sluggish market landscape. In the September-December quarter, the company’s operational revenue increased by 26.74% to INR 2,267.2 Cr from INR 1,788.8 Cr during the same time the previous year.

    It rose sequentially by 20.93% from INR 1,874.7 crore. The company run by Falguni Nayar stated in an investor presentation that its consolidated gross merchandise value (GMV) in Q3 FY25 was INR 4,527.9 Cr, a 25% increase over INR 3,617.9 Cr in the same period last year. In Q3 FY25, sales from Nykaa’s beauty and personal care (BPC) segment surged 27% year-over-year to INR 2,060.01 crore, while Nykaa Fashion persisted as a loss-incurring division during the period. Nykaa Fashion successfully reduced its loss by 12.3% year-over-year to INR 25.41 crore.

    Current ESOP Scenario in India

    According to a 2024 survey of 160 companies, 78% of them offered employee stock option plans (ESOPs) to their staff, a considerable increase from 59% in 2021. This indicates that ESOPs are becoming more and more popular among startup owners. More firms are now offering ESOPs to all employees, not only senior management, according to a survey done by Saison Capital, XA Network, and Carta. Compared to one in four in 2021, one in three firms now provides these plans to all employees.

    Furthermore, the median ESOP pool size grew from 9% in 2021 to 12.6% in 2024, and 90% of founders now talk about ESOPs with candidates during interviews or job offers, up from 75% in 2021. Additionally, the reasons for providing ESOPs have changed; in 2024, 40% of founders cited cost reductions, up from 28% in 2021.

    The founders cited the necessity to retain people as the second most important reason for putting these plans into action, behind creating a sense of ownership and company culture. Even with this increase, fewer than 30% of founders still fully understand the complexity of ESOPs, a percentage that hasn’t changed since 2021.

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  • Under ESOP, Nykaa Allots 1.80 Lakh Equity Shares

    Nykaa, a leading e-commerce company in the beauty and fashion industry, has granted its employees 1.80 lakh equity shares through the Employee Stock Option Plan (ESOP). This follows the startup’s announcement of a 66.3% increase in its consolidated net profit from INR 7.8 Cr to INR 12.97 Cr in the second quarter of FY25. As stated in a filing, “The equity shares so allotted shall rank pari-passu with the existing equity shares of the Company in all respects.”

     It hasn’t, however, revealed the shift in its paid-up capital.  It is relevant to mention that Nykaa incurred employee benefit expenses totalling INR 161.49 Cr in Q2 FY25. Compared to INR 136.32 Cr spent the previous year, this amount represents an 18.5% increase. The broking firm JM Financial has kept its “buy” recommendation for the e-commerce behemoth at INR 250 following the release of its financial results.

    Nykaa Scaling Financial Growth

    The broking firm claims that the startup has achieved growth despite a “unfavourable demand environment.” Nevertheless, broking firm Bernstein kept the startup’s “market-perform” rating, pointing to an 8.6% drop in the EBIDTA margin. It established INR 165 as the goal price. In the September quarter of FY25, Nykaa‘s operating revenue increased 24.4% to INR 1,874.74 Cr from INR 1,746.11 Cr in the second quarter of FY24. Revenue grew 7.2% on a quarter-over-quarter (QoQ) basis from INR 1,753.44 Cr.

    BPC Segment Continues to be Highest Revenue Generator

    The fashion vertical continues to trail behind, despite the beauty and personal care (BPC) segment showcasing a 24.3% YoY gain in revenue to INR 1,702.89 Cr. In Q2 FY25, however, this segment reported a 21.7% YoY increase in revenue to INR 166.10 Cr. The startup’s total costs increased by 7.3% QoQ and 23.7% YoY to INR 1,858.93 Cr. The company’s biggest expenditures were on marketing, personnel benefits, and the acquisition of traded goods.

    ESOP is Gaining Popularity Among Indian Startups

    According to a 2024 survey of 160 companies, 78% of them offered employee stock option plans (ESOPs) to their staff, a considerable increase from 59% in 2021. This indicates that ESOPs are becoming more and more popular among startup owners. More firms are now offering ESOPs to all employees, not only senior management, according to a survey done by Saison Capital, XA Network, and Carta. Compared to one in four in 2021, one in three firms now provide these plans to all employees.

    Furthermore, the median ESOP pool size grew from 9% in 2021 to 12.6% in 2024, and 90% of founders now talk about ESOPs with candidates during interviews or job offers, up from 75% in 2021. Additionally, the reasons for providing ESOPs have changed; in 2024, 40% of founders cited cost reductions, up from 28% in 2021. The founders cited the necessity to retain people as the second most important reason for putting these plans into action, behind creating a sense of ownership and company culture.

    Even with this increase, fewer than 30% of founders still fully understand the complexity of ESOPs, a percentage that hasn’t changed since 2021. Just 14% of founders felt educated about the tax consequences of ESOPs, which is a fairly low level of understanding.

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