Mumbai: The initial public offering (IPO) of Nykaa, India’s largest e-tailer of cosmetics, has opened for public subscription today and will close on November 1 with a price range of Rs 1,085 to Rs 1,125 per share.
FSN E-commerce Ventures, which owns Nykaa and Nykaa Fashion, an online marketplace for beauty and wellness items, raised Rs 2,396 crore from 174 anchor investors on Wednesday ahead of its maiden public offering.
The Rs 5352 crore IPO comprises of fresh equity shares totaling 630 crore and Offer for Sale (OFS) of 41,972,660 equity shares by approved issuers.
According to market experts, Nykaa shares are currently available in the gray market at a huge premium (GMP) of Rs 625. On November 11, the company’s shares will be listed on the two major stock exchanges, NSE and BSE.
key strengths
Founded in 2012 by former investment banker Falguni Nair, Nykaa had 55.8 million downloads across all mobile applications as of August 31, 2021. Nykaa launched their first physical store in 2014, and as of August 31, 2021, they have 80 physical outlets in India. 40 cities.
The company offers a diverse range of beauty, personal care, fashion products and its own line of products. Nykaa is divided into two business verticals: Nykaa (beauty and personal care items) and Nykaa Fashion (fashion) (apparel and accessories).
Across two business verticals, it has offered approximately 3.1 million SKUs (Stock-Keeping Units) to its clients from 4,078 national and international companies.
major financial
Nykaa is one of the few attractive online merchants in the country. In FY 2011, it made a net profit of Rs 62 crore as compared to a net loss of Rs 16 crore in the previous year. In FY21, total income grew 38% year-on-year to Rs 2,441 crore.
FSN makes its own beauty and personal care products through third party manufacturers in the beauty and personal care vertical. Nykaa Cosmetics, Nykaa Naturals, and Kay Beauty are some of the brands that sell these.
Should you subscribe?
According to market experts, Nykaa shares are currently available in the gray market at a huge premium (GMP) of Rs 625. The IPO has received a thumbs up from the analyst community, who believe that Nykaa is likely to get a ‘low premium’ as compared to its global peers. According to analysts, the valuation is attractive against the recently listed Unicorn CarTrade and Zomato. The valuation of Nykaa is 809.3 times its price to earnings. Leading brokerages like Anand Rathi Securities, Elara Capital, Hem Securities, KR Choksi, Motilal Oswal, Prabhudas Lilladher, Reliance Securities and Religare Securities are bullish on the IPO.
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