Nykaa parent, FSN E-Commerce to invest Rs 20 crore in subsidiary FSN International

Nykaa parent, FSN E-Commerce board approved an investment of Rs 20 crore in its wholly-owned subsidiary FSN International on a rights basis, as well as an investment of $2 million (Rs 16 crore) by FSN International into its overseas subsidiaries, Nessa International. 

The investments are expected to be completed by March 31, 2024. 

Once the transactions are completed, FSN International will continue to be the wholly-owned subsidiary of FSN E-Commerce and Nessa will continue to be a subsidiary of FSN International as well as a step-down subsidiary of FSN E-Commerce. 

According to a filing by the company, since FSN International is a wholly-owned subsidiary of the company, the transaction would fall under related-party transaction. “The transaction is being conducted at ‘arms length’,” the company said. Similarly, the investment in Nessa International would also be a related-party transaction. 

The FSN International investment is a strategic one for providing long-term funds to FSN International. The equity stake of the company in the subsidiary will continue to remain 100 per cent. The company held 51,00,000 shares at 100 per cent shareholding before the investment, which will remain 100 per cent but at 2,51,00,000 shares. The subscription to the equity shares was on the face value of Rs 10 per share, offered on rights issue basis. 

The Nessa International investment is also a strategic one for providing long-term funds through FSN International. The acquisition of equity shares of Nessa International by FSN International will be made at a price of $1 per share. Before the acquisition FSN International held 5,500 shares at 55 per cent shareholding, which has increased to approximately 20,05,500 shares in the same ratio. 

Incorporated on October 5, 2022, Nessa International is a multi-brand beauty and personal care (BPC) retail company. FSN International acquired 55 per cent stake on March 20. Nessa International is expected to commence its operations in FY24 and will undertake an omnichannel, multi branded BPC retail operation business in countries part of the Gulf Cooperation Council. 

FSN International was incorporated on December 10, 2019 and is engaged in the business of beauty, wellness, fitness, personal care, health care, skin care, hair care and other related products online and offline. It has three subsidiaries including FSN Global FZE in Dubai, Nykaa International in the UK, and Nessa International in UAE.

Also read: Nykaa shares: Why Abhishek Basumallick is not bullish on the stock; brokerages see up to 40% uspide?

Also read: Nykaa shares at Rs 100 or Rs 260? Here are Jefferies' bull & bear case scenarios