Nykaa did a bumper listing in the stock market on Wednesday, November 10. Shares of Nykaa opened at Rs 2,001 on the BSE, registering a premium of 77.87 per cent on the higher end of the issue price. With this impressive listing, India’s only profitable online marketplace has a valuation of close to $13 billion. The unique business model, healthy market share of beauty product and cosmetic brands helped Nykaa’s first proposition to attract the attention of investors. The Nykaa IPO received bids for over 216.59 crore shares against a total issue size of over 2.64 crore shares, data available with the National Stock Exchange (NSE) showed. Nykaa’s IPO was subscribed 82 times. The bidders’ share of eligible institutions got over 91 times the bids, while the quota reserved for bids from non-institutional buyers got 112 times the bids. The portion set aside for retail customers was booked over 12.24 times.
On NSE, Nykaa’s stock opened with a gain of 79.83 per cent at Rs 2,018. The share price by the high end of the Rs 1,125 Nykaa initial public offering (IPO) had pushed the company’s valuation up to Rs 1 lakh crore.
Ajit Mishra, Vice President (Research), Religare Broking said, “Nykaa has witnessed a strong listing due to positive market sentiment… Since it is the only profit making company in the digital space, it is gaining high investor traction. ” However, Mishra said, valuations of startups seem expensive at these (levels) considering the strong long-term growth prospects.
Launched in 2012 by Falguni Nair, Nykaa is one of the leading online marketplace for beauty and personal care products. Over the years, the online platform has found investors including private-equity firm TPG, Fidelity and Indian celebrities Alia Bhatt and Katrina Kaif. Nykaa runs its online operations through mobile applications and websites with 80 brick-and-mortar stores nationwide as of August 31.
With a tremendous start, the net worth of Falguni Nair, Founder and CEO, Nykaa reached new heights. The 58-year-old is now India’s richest self-made female billionaire. According to an AFP report, Nair is now one of the richest people in the world. After the stock listing, Nair has joined the founder and CEO of Nykaa, joining only six other women billionaires in the India Bloomberg Billionaires Index.
“I started Nykaa at the age of 50 without any experience. I hope Nykaa Yatra can inspire each of you to be the hero of your life,” she said before listing her company.
For investors, Jyoti Roy-DVP-Equity Strategist, Angel One Ltd suggested, “Nayaka IPO received a great response from investors and was subscribed 82x which translated into a blockbuster listing for the stock. The stock is trading at an 80 per cent premium to the issue price of Rs 1,125. We had given subscribe rating to the IPO. At current levels Nykaa is trading at a selling price of 38.9x FY2021 revenue which is discounted to Zomato (54xFY2021 revenue). Nykaa is one of the very few profitable unicorns in India and we believe the company is well positioned to benefit from the exponential growth in the online beauty and fashion retail business over the next decade. Considering the discounts offered to Zomato, we would advise investors to stay invested in Nykaa from a long-term perspective.”
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