The initial public offering(IPO) of India’s largest omni-channel destination for beauty and personal care, Nykaa, owned by FSN E-Commerce Ventures Ltd, was subscribed 82.42 times on Monday, which was the final day of the bidding of the issue that opened on October 28.
The Rs 5,300-crore initial public offering(IPO) of Nykaa received bids for 216.59 crore equity shares against an IPO size of 2.64 crore equity shares, as per the subscription data.
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 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.
Despite choppy market conditions characterised by weak investor sentiments, merchant banks were encouraged by the response the IPO garnered. Investors were particularly attracted to the IPO on account of its impressive grey market premium, pointing at the possibility of strong listing gains. As per market observers, the stocks are available at a premium of Rs 640 in the grey markets.
The finalisation of the allotment of shares is expected to take place on next Monday, November 8 the company is likely to list its shares three days later, on November 11.
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 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. 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.
