Nykaa IPO: Details, Date and Overview7 min read
Nykaa, (FSN E–COMMERCE VENTURES LIMITED) a company that has revolutionised makeup and skincare online delivery in the country is all set to go public. After impressing the women clan, the company is now looking to woo the stock-market investors.
Nykaa was incorporated in 2012 and marked its territory in the e-commerce business by 2015-2016 acting as a game changer for those indulging in online cosmetics, skincare and now clothing and footwear too.
The company also operates an offline channel, comprising 80 stores across 40 cities in India in three different store formats, as of August 2021.
The company is all set to hit the primary market with its Rs 5,352 crore IPO this week. The same will be a mix of a fresh issue and an offer for sale (OFS).
The price band of FSN E-commerce Ventures IPO has been fixed between Rs 1,085-1,125. The face value of each share is Rs.1.
At the upper range of price band, one lot of the IPO is worth Rs 13,500. A retail bidder can bid for a maximum of 14 lots.
The issue opened on Thursday, 28th October and ends on Monday, 1st November.
1. Know the Company:
Nykaa is a digitally native consumer technology platform, delivering a content-led, lifestyle retail experience to consumers. Since its incorporation in 2012, the company has invested both capital and creative energy towards designing a differentiated journey of brand discovery for its consumers.
It has a diverse portfolio of beauty, personal care and fashion products, including its owned brand products manufactured by the company.
As a result, it has established itself not only as a lifestyle retail platform, but also as a popular consumer brand. The company offers consumers an Omnichannel experience with an endeavor to cater to the consumers’ preferences and convenience:
Its online channels include mobile applications, websites and mobile sites. As of August 31, 2021, it has cumulative downloads of 55.8 million across all its mobile applications and during the five months ended August 31, 2021, 88.2% of the online GMV came through its mobile applications.
According to the RedSeer Report which has been exclusively commissioned and paid for by the company in connection with the offer, it has one of the highest share of mobile application-led transactions, among the leading online retail platforms in India during Financial Year 2021 and the five months ended August 31, 2021.
Its offline channel comprises 80 physical stores across 40 cities in India over three different store formats as of August 31, 2021. Its physical stores offer a select offering of products as well as a seamless experience across the physical and digital worlds.
2. Nykaa IPO Details:
3. Objective of the issue:
With the raised amount, the company intends to invest the amount in certain of its subsidiaries, namely, FSN Brands and/or Nykaa Fashion for funding the set-up of new retail stores.
The capital expenditure that will be incurred by the company and investment in certain of its subsidiaries, namely, Nykaa E-Retail, Nykaa Fashion and FSN Brands for funding the set-up of new warehouses.
The e-commerce site will be using the amount for repayment or prepayment, in full or in part, of certain borrowings availed by the company and one of its Subsidiaries, namely, Nykaa E-Retail.
They will use the amount to enhance the visibility and awareness of its brands and for general corporate purposes
In addition to the above objectives, the company intends to strengthen its capital base and expects to receive the benefits of listing the Equity Shares on the Stock Exchanges, including, among other things, creation of a public market for its Equity Shares in India.
4. Strengths of the company:
- It is one of India’s leading lifestyle focused consumer technology platform.
- The website is one of the most preferred destination for luxury and prestige products in India for consumers.
- The company is resilient, capital efficient business with a combination of growth and profitability.
- It is proprietary technology stack.
- Founder-led company supported by a strong management team
5. Risks involved:
- Inability to manage the growth or execute its strategies effectively
- Failure to acquire new consumers or to do so in a cost-effective manner
- Business dependent upon the user behaviour and continued acceptance of digital platforms.
- Pending litigations against the company & its subsidiaries.
- The company has certain contingent liabilities.
6. Important Financial data:
As of August 31, 2021, the company offered approximately 3.1 million SKUs from 4,078 national and international brands to its consumers across business verticals. In the Financial Year 2021, the total GMV was ₹4,046 Cr, which grew 50.7% from the Financial Year 2020.
7. Peer Comparison:
There are no listed companies in India that engage in a business similar to that of the Company. Accordingly, it is not possible to provide an industry comparison in relation to the Company.
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In the FY 2021, the country’s stock exchanges (both NSE and BSE combined) witnessed 30 IPOs excluding REIT’s and FPO’s and raised proceeds worth Rs 31,276.74 crores in total. Some of the successful IPOs of FY 2021 were Burger King, Indigo Paints, Happiest Minds, and Mrs Bectors among others.
In December, some of the most successful IPO was Burger King that saw a listing day gain of 130.67% and Mrs Bectors that saw a listing gain of 106.79%. The same fervour continued in January with 4 back to back IPOs including major IPOs of Indigo paints and IRFC.
In February, Nureca IPO yielded a listing gain of 66.66% while Railtel also gave a 28% gain. March 2021 has been a busy month with 9 IPO’s. While IPOs of Suryoday Small Finance Bank, Kalyan Jewellers, Craftsman Automation and Anupam Rasayan traded at a discount on listing day MTAR technologies was subscribed over 200 times and Nazara over 175 times and had a listing gain of 88.22% and 44.60% respectively.
June had 5 IPOs and July had 6 IPOs with all of them having listing gains. August had around 8 IPO’s with a mixed response from investors. September has had 5 IPO’s out of which Ami Organics, Vijaya diagnostics and Sansera Engineering listed at a premium and Paras defence and space technologies listed with gain around 175% on listing day.
Last 10 IPO Performance:
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