Nykaa shares saw a stellar debut on Dalal Street on Wednesday, November 10. Nykaa share opened at Rs 2,001 on BSE, an increase of 77.87 per cent premium over the higher end of the issue price. On NSE, Nykaa stock opened made a debut at Rs 2,018, up over 79.83 per cent. The unique inventory-led business model and healthy share in the premium beauty and personal care segment in India has attracted an overwhelming response from investors. With the bumper listing, the market capitalisation of FSN E-commerce Ventures, crossed Rs 1-lakh-crore-mark on Wednesday.
Nykaa IPO opened for subscription from October 28-November 1, 2021. The company planned to raise Rs 5,352 crore from its maiden public offer. Nykaa operator FSN E–Commerce Ventures has the price band at Rs 1,085-1,125 per equity share. Nykaa IPO comprises of Rs 630 crore and an offer for sale (OFS) of 4.19 crore equity shares by several shareholders, including the promoters and some investors. The net proceeds from Nykaa IPO will go towards two subsidiaries — FSN Brands and or Nykaa Fashion and for setting up new retail stores.
Nykaa IPO received stellar response from investors when it had opened for subscriptions. Nykaa IPO received bids of over 216.59 crore shares against the total issue size of over 2.64 crore shares, data available with the National Stock Exchange (NSE) showed. Nykaa IPO was subscribed whopping 82 times. The portion for qualified institutions bidders subscribed over 91 times while the quota reserved for non-institutional buyers’ quote received bids for 112 times. The portion set aside for retail subscribers, was booked over 12.24 times.
“With a diverse assortment of beauty, personal care and fashion products, Nykaa’s supremacy lies in its ability to retain and attract customers. Nykaa has witnessed sustained growth in GMV over the years and has the highest AOV. Its robust technology and content engine, focus on capital efficiency and positive unit economics coupled with immense headroom for penetration, provide the company a long runway for growth,” said Ravi Singh, head of research & vice president, ShareIndia.
For investors, Singh said, “We advice investors to cover their 50 per cent position at current premium and rest hold with closing stoploss of 1850 for the target of 2500. Nykaa has a strong fundamental so investors may hold their position for longer period.”
The omni-channel beauty and consumer-care products retailer posted a net profit of Rs 61.96 crore in FY21 against a net loss of Rs 16.34 crore in FY20. The revenue from operations was Rs 2,440.89 crore in financial year 2020 which grew 38.10 per cent from the financial year 2020. The firm’s total GMV was Rs 4,045.98 crore, which rose 50.7 per cent over the financial year 2020. The EBITDA margin was recorded at 6.61 per cent in the financial year 2021.
“As there it is subscribed nearly 91.18 times by QIB’s and 112 times by Non Institutional Investors. There is a huge chance that these entity will be chasing the IPO to get shares allotted hence driving price higher. a) Future scope of Nykaa is good, b) Bull run and demand by QIB and NII. We recommed the investors to hold Nykaa shares,” Manoj Dalmia, founder and director, Proficient Equities Limited.
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