Shares of FSN E-Commerce Ventures Ltd, the parent firm of Nykaa, rose on Friday after the e-commerce beauty product platform announced receiving its board’s approval to invest up to $2.5 million in its United Arab Emirates-based subsidiary.

Nykaa’s shares hit an intraday high of Rs 166, 1.72% higher than its previous closing price on the National Stock Exchange (NSE). At 02:15 pm, the stock was trading 1.01% higher at Rs 164.85. 

According to Nykaa’s exchange filing dated February 1, the company’s Board of Directors has approved the proposal of investment by its subsidiary Nessa International Holdings of up to $2.5 million into Nysaa Beauty LLC.

The recently established Nysaa Beauty focuses on omnichannel, multi-branded beauty retail operations in the UAE. For operational support, Nessa International is making its first strategic investment in its wholly-owned subsidiary, Nysaa Beauty. 

Nessa International will acquire equity shares of Nysaa Beauty LLC for 1,000 Arab Emirates dirham per share. The investment is expected to be completed in one or more tranches by March 31, 2024. 

Through this investment, Nessa International will hold a 100% shareholding in Nysaa Beauty. FSN E-Commerce Ventures indirectly holds 55% of the shareholding of Nessa International through FSN International Limited. Hence, it will hold 55% of the shareholding in Nysaa Beauty.