Nykaa’s parent company FSN E-Commerce Ventures Ltd. recently launched its initial public offering (IPO) which was subscribed 4.86 times excluding the anchor book on Friday. On the first day of sale, the issue was fully subscribed. Before the IPO, Rs 2,396 was raised by Nykaa from anchor investors.
Nykaa IPO has been subscribed 6.51 times with retail category booked 8.84x, NII 8.45 times, QIB 4.86 times and employees reserved bid 1.48 times as of 11:25 am on day 3.
The IPO consists of a fresh issue of equity shares worth Rs 630 crores and an offer for sale (OFS) of 41,972,660 equity shares by promoters and existing shareholders.
As per market observers, Nykaa shares are available at a premium (GMP) slipped from the previous day but still remains strong around ₹570 in the grey market today. The company's shares are expected to list on leading stock exchanges NSE and BSE on November 11.
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Hem Securities gave an upvote saying, “Looking after scale of operations, strong management team, profitable concern & high growth prospects in the industry due to large under penetration, we believe that company has created an industry itself. Therefore, we recommend “Subscribe" on issues for listing gain as well as long term."
Founded in 2012 by former investment banker Falguni Nayar, as of August 31, 2021, Nykaa had cumulative downloads of 55.8 million across all their mobile applications. Nykaa had posted a net profit of ₹61.9 crores in FY21 compared to a loss of ₹16.3 crores in FY20. Nykaa opened its first physical store in 2014 and has 80 physical stores across 40 cities as of August 31, 2021.
Nykaa was founded in 2012 by Falguni Nayar who was a former investment banker and had a total download of 55.8 million across all their mobile applications as of 31 August 2021. In FY21 the company posted a net profit of Rs 61.9 crores as compared to a loss of Rs 16.3 crores in FY20. Nykaa’s first physical store was opened in 2014 and currently, it has 80 physical stores across 40 cities.
Nykaa is planning to move forward from IPO for expansion by building new stores and establishing new warehouses along with clearing off some of its debt, which would reduce interest costs and increase its profitability.
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A brokerage firm Prabhuas Lilladher has suggested using a ‘Subscribe’ rating to IPO of FSN E-Commerce Ventures which operates Nykaa. “We believe Nykaa’s entry into fashion segment holds promise with focus on premium customers, curated and managed marketplace offering over 1.8 million SKUs.”
The firm further stated that private labels like NYKD, Pippa Bella, 20 dresses and industry-leading AOV of ₹3977 and ~25% contribution to GMV in 5MFY22 has risen.