Nykaa IPO has been fully subscribed on the first day of its offer that opened for bidding on Thursday
The initial public offering (IPO) of Nykaa, with a price band of ₹1,085-1,125 per share, has opened for public subscription on Thursday and will conclude on November 1. Ahead of its IPO, Nykaa on Wednesday said it has raised ₹2,396 crore from anchor investors. The issue was fully subscribed on the first day of the sale.
At the end of Day 1 of bidding, Nykaa IPO was subscribed 1.55 times with the retail portion fully booked 5.5 times, BSE data showed. The HNI portion was subscribed 0.6 times, QIB 1.40 times and employees 0.68 times.
As per market observers, Nykaa shares are available at a strong premium (GMP) of ₹615 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.
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.
“The rise of digital-only brands and the direct-to-customer online channel has introduced innovative and effective ways for brands to sell. Local emerging brands have also witnessed increased popularity and following in recent times. Considering the future prospect for the company and it being placed at a sweet spot as the first mover advantage we assign “Subscribe-Long Term” Rating to this IPO,” said brokerage house Anand Rathi.
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.
