The initial public offer (IPO) of e-commerce beauty giant Nykaa – the country’s first woman-led unicorn, opens for subscription tomorrow, October 28. FSN E-Commerce Ventures operates Nykaa and Nykaa Fashion – the two major verticals of the company. The consumer technology platform consists of a diverse portfolio of beauty, personal care, and fashion products – including its own brand of products manufactured by itself.
Nykaa IPO: 10 Things To Know
IPO Dates: The bidding for the beauty giant’s IPO will start on October 28 and close on November 1, 2021. The basis of the allotment date will be done on November 8. The issue is likely to be listed in November 2021 on stock exchanges BSE and NSE.
IPO Price Band: The company 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.
IPO Details: The IPO comprises a fresh issue of Rs 630 crore and an offer for sale (OFS) of 4.19 crore equity shares. The offer includes a reservation of up to 250,000 equity shares for purchase by eligible employees.
IPO Lead Managers: BofA Securities India, Citigroup Global Markets India, ICICI Securities, JM Financial Consultants, Kotak Mahindra Capital Company, and Morgan Stanley India Company
Fund Raising: At the upper band, FSN E-Commerce Ventures aims to raise around Rs 5,351.92 crore through the public issue, according to the company’s statement.
Issue Objectives: Nykaa will utilise the the IPO proceeds for investing Rs 42 crore in its subsidiaries – FSN Brands and/or Nykaa Fashion for funding the establishment of new retail stores.
-It will use Rs 42 crore towards capital expenditure and investment in subsidiaries – Nykaa E-Retail, Nykaa Fashion and FSN Brands for funding the set-up of new warehouses
-Rs 156 crore will be used for repayment of debt availed by the company and its subsidiary Nykaa E-Retail and Rs 234 crore will be used for brand awareness and visibility.
Company Details: Nykaa – founded by banker-turned-businesswoman Falguni Nayar, was incorporated in 2012. The company runs the beauty and personal care segment through the Nykaa vertical and apparel and accessories vertical through Nykaa Fashion.
-The company manufactures its owned brand beauty and personal care products through third-party manufacturers and are sold under their brand name such as Nykaa Cosmetics, Nykaa Naturals, and Kay Beauty.
– Nykaa Fashion consists of 1,434 brands and 2.8 million SKUs (stock-keeping units) with fashion products across four consumer divisions – women, men, kids, and home
-It also operates an offline channel, comprising 80 stores across 40 cities in India in three different store formats.
Promoters and Investors: Falguni Nayar, Sanjay Nayar, Falguni Nayar Family Trust And Sanjay Nayar Family Trust are the promoters of the company. They have a 45.99 percent shareholding in the company. The total shareholding, including the promoter group, is 54.22 percent.
-Falguni Nayar is the founder, Executive Chairperson & Managing Director and CEO of the company. She holds 26 years of experience in e-commerce, investment banking, and broking.
-The remaining stake is held by public shareholders, including Steadview Capital Mauritius (3.46 per cent stake), Kravis Investment Partners LLC (1.14 per cent), TPG Growth IV SF Pte Limited (3.44 per cent), among few others.
Company Financials: During the April-June quarter of current fiscal, Nykaa clocked revenues of Rs 816.99 crore – marking a growth of 183.05 per cent year-on-year. The net profit during the first quarter was Rs 3.52 crore, with an EBITDA of Rs 26.94 crore and margin of 3.30 per cent.
What Analysts Say: ”On a price-to-sales basis, Nykaa is priced at 21.5 times FY21 sales per share. There are no immediate listed peers for the company, and hence, it could enjoy a scarcity premium in India.
Given the company’s market leadership status, strong topline growth, robust outlook, positive sentiment due to marquee investors and promoter group, investors who wish to take exposure to an under-penetrated online cosmetics e-tailing business could consider investing in this issue,” SEBI-registered investment advisor INDmoney said.