Nykaa got a strong reaction from investors in the first three days itself.
Investors have reacted well to Nykaa’s initial public offering (IPO) in the first two days. On the second day, the Rs 5,352-crore public offer was 4.8 times oversubscribed. On Day 2, investors submitted bids for 12,77,48,892 equity shares against total issue size of 2,64,85,479 equity shares, according to National Stock Exchange (NSE) statistics.Â
Nykaa’s IPO sailed on the first day of bidding, thanks to a strong response from retail investors. The component intended for ordinary investors received 6.3 times the number of offers, while the portion earmarked for qualified institutional buyers (QIB) received 4.8 times the number of bids.
The component intended for ordinary investors received 6.3 times the number of offers, while the portion earmarked for QIB received 4.8 times the number of bids. The quota for high-net-worth individuals (HNI) was 4.2 times oversubscribed.
The price range for the equity shares has been set at Rs 1,085-1,125 per equity share by the online beauty goods retailer. “Nykaa is the leading speciality beauty and personal care platform in India in terms of value of items sold in FY21,” according to Ventura Securities.
Smartphones have drastically impacted the Indian mobile phone market in the previous 5-6 years, owing to the availability of low-cost alternatives from local and international companies.Â
India is anticipated to have 75-85 crore smartphone users by 2025, meaning a 52-59 per cent smartphone penetration rate. The amount of money spent on vital health and wellness items by consumers is increasing. Anand Rathi Communications’ Pratik Prajapati remarked, “Beauty and personal care items and gadgets for at-home grooming are also experiencing an increase in demand.”
The firm is being sold at 21.6x price to sales for FY21 in the high range of the IPO. The IPO’s valuation is high, with a market cap of Rs 53,204 crore. There are no publicly traded firms in India that operate in a comparable industry to the corporation. As a result, the firm has a one-of-a-kind business proposition among its consumer base, as well as an aspirational brand image that bodes well for the future.”
JM Financial and Investment Consultancy Services will sell 9.14 lakh equity shares, while Yogesh Agencies & The Nykaa IPO consists of a Rs 630 crore new issuance and a 4.19 crore equity share offer for sale (OFS) by many shareholders, including the founders and confident investors. Sanjay Nayar Family Trust, the promoter, would sell up to 48 lakh equity shares through OFS.
At the same time, TPG Growth IV SF Pte Ltd and Lighthouse India Fund III, the investors, will dilute 54.21 lakh and 48.44 lakh equity shares, respectively.
Investments Pvt Ltd will sell 25.38 lakh equity shares. Other stockholders include Lighthouse India III Employee Trust, Sunil Kant Munjal, Harindarpal Singh Banga, Indra Banga, Narotam Sekhsaria, Rishabh Mariwala, Jeenoo Khakhar, Kanika Khakhar, and Isha Khakhar, Michael Carlos, Samina Hamied, Sanjay Maliah, Vikram Sud, and Karan Swani.
On Monday, Nykaa’s unlisted stocks were selling on the grey market for Rs 570. Nykaa shares were trading at a grey market premium of Rs 1,695, up from the higher end of the issue price of Rs 1,125 on November 1 by more than 50%. Nykaa’s grey market premium, on the other hand, has dropped in recent days.
“Nykaa’s dominance resides in its ability to maintain and attract clients with a vast range of beauty, personal care, and fashion items. Nykaa has seen consistent GMV increase throughout the years and has the highest AOV.
The company’s solid technology and content engine and its focus on capital efficiency and good unit economics present it with a long runway for development. The lack of PAT positive new-age enterprises in India, as well as Nykaa’s first mover advantage, bode well for Nykaa’s ability to fetch a more significant premium.
Yesha Shah, head of equities research at Samco Securities, stated, “We believe the firm is capable of strengthening its financial indicators and solidifying its position moving forward and hence suggest investors to Subscribe to the issue.”
