Personal and Body care brand Nykaa made an outstanding debut on the Indian stock exchanges on Wednesday, with shares listing at a premium of up to 79 percent compared with the issue price.
On Bombay Stock Exchange, the stock of FSN E-Commerce Ventures — the parent organisation of Nykaa — was listed on the secondary market at Rs 2,001, a premium of 77.9 percent over the issue price of Rs 1,125. On NSE, Nykaa shares debuted at Rs 2,018, a premium of 79.4 percent.
Meanwhile, the initial trade session on Wednesday saw Nykaa shares touching the Rs 2,063 levels on the BSE, taking the market capitalisation of the company to over Rs 1 lakh crores. At the time of posting this report, the share price was trading at above Rs 2,200.
As a result of the spectacular performance of the stock, Nykaa founder Falguni Nayar has become India’s wealthiest self-made female billionaire. As she owns around half of the company, she is now worth around $6.5 billion.
IPO issue subscribed by over 82.42 times
The robust listing on its debut can be attributed to the strong demand from investors as the Rs 5,352-crore public issue was subscribed by 82.42 times during October 28-November 1, receiving bids for 216.59 crore equity shares against the offer size of 2.64 crore equity shares.
The qualified institutional investors (QII) drew bids for 131 crore equity shares, or 92.17 times the shares on offer while the non-institutional category, which also includes high net-worth individuals(HNIs), was subscribed 112.51 times. Demand from retail investors, who can invest up to ₹2 lakh in an IPO, stood at 12.29 times.
Falguni Nayar-promoted Nykaa intends to sweep Rs 5,351.92 crore through IPO. The offer comprises 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.
Nykaa plans to use the raised capital to expand its business by setting up new retail stores and establishing new warehouses. It also aims to reduce its debts, which should bring down cost incurred in interest and boost its profitability.
Nykaa, founded in 2012 by Falguni Nayar, among a few start-ups to achieve profitability
Nykaa has a diverse portfolio of beauty, personal care and fashion products, including products manufactured by its parent company, FSN E-Commerce Ventures. It has established itself not just as an online destination for beauty and personal care products but also as a consumer brand.
The company conducts its businesses chiefly through arrangements with beauty, personal care and fashion brands, delivery companies, manufacturers, distributors and other vendors, including suppliers of packaging material.
Nykaa was founded in 2012 by Falguni Nayar, an Indian businesswoman who worked as an Investment Banker at Kotak Mahindra for 19 years. Unlike most startups, Nykaa has managed to achieve profitability, posting a consolidated net profit of Rs 61 crore for the year ending on March 31, 2021 (FY21) as compared to a loss of Rs 16.3 crore in FY20. Bollywood actors Katrina Kaif and Alia Bhatt had last year made undisclosed investments in the company. Kaif had made the investment days after she launched her beauty line ‘Kay Beauty’ on the e-tail platform.
