Nykaa lists at 79% premium to issue price; market cap crosses Rs 1 trillion

Post listing, shares of Nykaa touched a high of Rs 2,129, up 89 per cent versus the issue price of Rs 1,125

FSN E-Commerce Ventures (Nykaa) made a strong stock market debut, with its shares listing at Rs 2,018, a 79 per cent premium over its issue price of Rs 1,125 per share, on the National Stock Exchange (NSE) on Wednesday. On the BSE, the stock opened at Rs 2,001, a 78 per cent premium against the issue price. Post listing, shares of Nykaa scaled a high of Rs 2,129, up 89 per cent versus the issue price.

The strong listing saw Nykaa's market capitalisation (market-cap) cross Rs 1-trillion mark and enter the top-60 most valuable companies on the BSE. With a market-cap of Rs 1.003 trillion at 10:03 am, Nykaa stood at 55th position in the overall market-cap ranking of the BSE listed companies, exchange data showed.

The Rs 5,300-crore initial public offering (IPO) of FSN E-Commerce Ventures, which operates Nykaa, saw a strong investor interest and was subscribed 82.4 times. The institutional investor portion was subscribed 92 times, the wealthy investor portion 112.5 times, the retail investor portion 12.3 times, and the portion reserved for employees by 1.8 times.

The company plans to utilise the proceeds of the fresh issue for improving its brand visibility and awareness, debt repayment, and setting up retail stores and warehouses.

FSN E-Commerce Ventures, more commonly known as Nykaa, is a consumer technology platform, delivering a content-led, lifestyle retail experience to consumers through its diverse portfolio of beauty, personal care & fashion products including their own brand products.

Nykaa is the largest specialty beauty and personal care platform in India in terms of value of products sold in FY21 and one of the fastest growing fashion platforms in India based on growth in GMV. The company has the highest average order value (AOV) among leading online beauty and personal care platforms in India.

"The company carries a large number of leading luxury and prestige beauty and personal care brands making it the customer’s retail destination of choice in India. It is a capital efficient business with strong growth and profitability. Its capital turnover ratio improved from 3.1x in FY19 to 4.2x in FY21. The company values its brand relationships and has a team of brand managers who work closely with brands to strategise and execute growth and brand building strategies" ICICI Securities had said in a IPO note.

While most analysts recommended subscribing to the issue from a long-term perspective, they do caution against the valuation and online segment that the company operates in. CLICK HERE FOR BROKERAGES VIEWS