Nykaa is a multi-brand beauty and personal care platform in India and is expanding rapidly into fashion and lifestyle segments. It is also trying to woo men with the launch of Nykaa Man.
The 5,352 crore IPO of FSN E-commerce Ventures, which owns Nykaa, opened on Thursday. The TPG-backed startup's initial stake sale is a mix of a fresh issue and an offer for sale (OFS).
Kotak Mahindra Capital, Morgan Stanley India, BofA Securities India, Citigroup Global Markets India, JM Financial and ICICI Securities are merchant bankers to the issue.
The initial public offering (IPO) of Nykaa, with a price band of Rs. 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 Rs. 2,396 crore from anchor investors. The issue was fully subscribed on the first day of the sale.
At the end of Day 2 of the bidding, Nykaa IPO was subscribed around 5 times with the retail portion booked 6.4 times. The portion reserved for employees had been subscribed 1.2 times, HNIs 4.2 times, and QIB 4.7 times.
Here is what the market observers have to say
"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 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.
"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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