The initial public offering (IPO) of Nykaa, with a price band of ₹1,085-1,125 per share, is all set to open for public subscription today and will conclude on November 1. Ahead of its IPO, Nykaa on Wednesday said it has raised ₹2,396 crore from anchor investors.
The IPO of FSN E-Commerce Ventures, which runs online marketplace for beauty and wellness products Nykaa, comprises fresh issue of equity shares worth ₹630 crore and an offer for sale (OFS) of 41,972,660 equity shares by promoter and existing shareholders.
As per market observers, Nykaa shares are available at a strong premium (GMP) of ₹625 in the grey market today. The company’s shares are expected to list on leading stock exchanges NSE and BSE on November 11.
“Nykaa is one of the very few profitable Unicorns in India and we believe that the company is well positioned to benefit from the exponential growth in the online beauty and fashion retailing business over the next decade. Hence we believe that that the valuations are justified and hence we recommend SUBSCRIBE to the issue,” said brokerage house Angel One in an IPO note.
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 crore in FY21 compared to a loss of ₹16.3 crore in FY20. Nykaa opened their first physical store in 2014, and has 80 physical stores across 40 cities as of August 31, 2021.
“Large segment for a vertical commerce play for beauty and lifestyle. The company is following the route of Amazon as a marketplace and thereon identifying segments to build/buy brands to create a portfolio of private label brands. This would help in significantly improving margins. The issue will be oversubscribed in our opinion and we recommend subscribing to the issue,” said Neha Khanna, Director, ValPro.
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