The question is not whether the bonus issue is generating good publicity or not. The real question is whether the issue of bonus shares is ethically correct or not.
After the issue of the bonus shares, the post IPO investors have to pay substantial STCG on sale of shares even when they are losing money on the trade. Small investors buy and sell as per their personal financial goals like family wedding or child education. It is really ridiculous to expect someone to pay STCG on a trade where one is losing as much as 60% of the principal amount. I know of small investors who are not financially literate enough to carry forward the long term capital loss and set it off against future income.
On the other hand, the bonus shares artificially lowers the LTCG liability for the promoter group and early investors who have very low acquisition price, looking for a partial exit.
May be Nykaa will continue to grow and turn out to be a multibagger and all this will be be forgotten but that does not absolve the mamagement of their failure to carry on their fiduciary responsibility towards the small investors.
My two cents.
Discl. Not invested.
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