Beauty E-Tailer Nykaa's IPO Opens On October 28: Should You Subscribe
New Delhi: E-commerce beauty giant Nykaa will open its initial public offering (IPO) to subscribers on Thursday. The company aims to raise around Rs 5,352 crore through its public issue. FSN E-Commerce Ventures operates online marketplace Nykaa. The three-day IPO will conclude on November 1.
It has fixed a price band of Rs 1,085-1,125 per share for its public offer. Bids can be made for a minimum of 12 equity shares and in multiples of 12 equity shares thereafter up to 14 lots. The offer includes a reservation of up to 250,000 equity shares for purchase by eligible employees, the company said in a statement.
Existing investors like such as TPG Growth IV SF Pte, Lighthouse India Fund and others are expected to offload their shares in the IPO. Promoters, including founder and chief executive officer Falguni Nayar, currently own more than 50 per cent share in the company.
Founded by former investment banker Ms Nayar, India's first woman-led unicorn offers 4,000 beauty, personal care and fashion brands through its website, app and 80-odd brick-and-mortar stores.
Should You Subscribe:
"The issue is valued at 16.1x FY22 (2021-22) enterprise value/sales on a post issue and annualised basis, which seems to be similar to other Indian unicorns. We believe Nykaa is rightly placed to tap the high growth digital/online penetration in BPC (beauty and personal care)/fashion market. We recommend 'Subscribe'. Investors with high risk appetite can 'Subscribe' for listing gains given fancy for unique and first of its kind listing in the e-commerce space," said Motilal Oswal Financial Services in its IPO note.
"The IPO at the upper band is offered at 21.6x price to sales for FY21 (2020-21). The valuation of the IPO is rich. There are no listed companies in India that engage in a business similar to that of the company. Accordingly, the company has a unique business proposition amongst its customer base and also has an aspirational brand image which augurs well for the company in the long term," brokerage house Anand Rathi stated in its 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 IP," it added.
This year, around 30 companies, including state-owned Life Insurance Corp (LIC) and digital payments firm Paytm, have announced plans to go public.