The Curious Case of Nykaa’s Bonus Issue

Abstract

Nykaa (FSN E-Commerce Ventures) distributed 2,373,563,075 bonus equity units of ₹ 1 on 12 November 2022. With Nykaa’s 5:1 bonus issue, questions have been raised about alleged weak governance practises at the firm that went public in November 2021. The timing of this bonus issue created concerns about the company’s motives and suggested to the market that it was attempting to manipulate the stock price and prevent a potential sell-off as the market grew more wary of the business models of new-age companies. The case study queries whether the controversial bonus issue of Nykaa represented a failure in corporate governance.