FSN E-commerce Ventures (Nykaa) rose 1.03% to Rs 1298.40 after the company said it has signed an agreement with the Middle East's Apparel Group to recreate omni-channel beauty retail platform in the Gulf Cooperation Council.
Nykaa's board on Thursday, 6 October 2022, approved entering into share purchase cum shareholders' agreement by FSN International, a wholly owned subsidiary of the company, with UAE-based fashion and lifestyle retail conglomerate Apparel Group for undertaking an omni-channel, multi branded beauty retail operation business in the countries that are part of the Gulf Cooperation Council (GCC) namely the Kingdom of Bahrain, State of Kuwait, Sultanate of Oman, State of Qatar, Kingdom of Saudi Arabia and the United Arab Emirates (UAE).The proposed multi branded beauty retail operation business will be undertaken through an entity to be incorporated in the Abu Dhabi Global Market in which FSN International will hold 55% stake and balance 45% will be held by Apparel.
The board of FSN International has also approved execution of the agreement for the proposed strategic alliance mentioned above which are subject to fulfilment of various terms and conditions as specified in the agreement and statutory approvals, if any. The transaction is expected to be completed by 31 March 2023.
Nykaa will leverage the Apparel Group's robust retail infrastructure network and deep market relationships to build distinctive Gulf Cooperation Council (GCC) focused beauty offerings in the UAE, Kingdom of Saudi Arabia (KSA), Qatar, Oman, Kuwait and Bahrain.
Founded in 1996, the Apparel Group is one of the largest omnichannel retailers in the Middle East based out of the UAE. It is home to more than 75 lifestyle and beauty brands with over 2,000 stores in 14 countries. The Group brings over two decades of deep understanding of retailing in the GCC, having steadily kept their finger on the pulse of evolving consumer trends.
The GCC presents a large opportunity for Nykaa to extend its highly focused value offering and drive the region's offline and online retail growth story with the Apparel Group. As per a Red Seer report, KSA & the UAE, two of the region's biggest beauty and personal care markets, were sized at $17.1bn and $6.6bn respectively in 2021 and are projected to grow at a CAGR of 7% and 9% respectively over the next 3 years.
Founded in 2012, Nykaa (FSN E-Commerce) is one of India's leading lifestyle-focused consumer technologies platforms. It offers over 4,500 brands and over 4.6 million product SKUs through its website and mobile applications.
The company's consolidated net profit rose 33% to Rs 4.55 crore in Q1 FY23 as against net profit of Rs 3.42 crore in Q1 FY22. Revenue from operations jumped 41% year on year (YoY) to Rs 1,148.42 crore in Q1 FY23.
Shares of FSN E-Commerce entered the bourses on 10 November 2021. It was listed at Rs 2001, a premium of 77.87% to the issue price of Rs 1125. The initial public offer (IPO) of Nykaa was subscribed 81.78 times. The issue opened for bidding on 28 October 2021 and it closed on 1 November 2021. The price band of the IPO was fixed at Rs 1,085-1,125 per share.
The company's board on 3 October 2022 approved issuing 5 bonus equity shares for each share held (5:1). The board also approved fixing 3 November 2022, as the record date for the proposed bonus issue. The proposed bonus issue is subject to shareholders' approval by way of postal ballot.
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