The initial public offering (IPO) of Nykaa and Nykaa Fashion operator FSN E-Commerce Ventures was subscribed 81.78 times by November 1, the final day of bidding of the issue that opened on October 28.
The offer has received bids for 216.59 crore equity shares against an IPO size of 2.64 crore equity shares, as per the subscription data.
Qualified institutional investors (QII) put in bids 91.18 times the portion set aside for them and non-institutional investors bought 112.02 times the shares against their reserved portion.
A part set aside for retail investors was subscribed 12.24 times and that of employees saw 1.88 times subscription.
Falguni Nayar-promoted Nykaa aims to mop up Rs 5,351.92 crore through IPO. The offer consists of a fresh issue of Rs 630 crore and an offer-for-sale of Rs 4,721.92 crore worth of shares by the promoter and investors. The price band for the offer has been fixed at Rs 1,085-1,125 per share.
A sum of Rs 2,396 crore was raised from anchor investors on October 27.
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“We recommend to go for Nykaa as it has a large beauty and personal care (BPC) market opportunity growing at 12 percent per annum and fashion opportunity growing at 18 percent per annum by 2025 ,” Astha Jain, Senior Research Analyst at Hem Securities, said.
The company posted strong growth without a substantial cash burn and made profits along with a strong improvement in capital turnover ratio from 3.1 times in the FY19 to 4.2 times in FY21, she said. This shows that the company focused on capital efficiency and unit economics, while simultaneously building for scale and growth
“Looking at the scale of operations, strong management team, profitability and high growth prospects in the industry due to large under-penetration, we believe that the company has created an industry in itself,” she said.
Price and sales multiple seems to be an important tool for fintech companies, according to her.
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FSN E-Commerce has a diverse portfolio of beauty, personal care and fashion products, including products manufactured by the company. It has established itself not only as a lifestyle retail platform but also as a consumer brand. It offers consumers an omnichannel experience, analysts said.
The company operates its businesses primarily through arrangements with beauty, personal care and fashion brands, delivery companies, manufacturers, distributors and other vendors, including suppliers of packaging material.Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.