Shares of Nykaa formed a strong market appearance on the Indian stock exchanges on Wednesday. The stock started trading at a premium of over 82% at ₹2,054 per share on the NSE as related to its IPO issue price of ₹1,125 apiece. Meanwhile, Nykaa shares are listed at ₹2,063 on the BSE, with the market capitalization overpass ₹1 lakh crore.
The initial public offering of FSN E-Commerce Ventures Ltd, which operates an online marketplace for beauty and wellness products Nykaa, was subscribed 81.78 times on the last day of subscription, mainly supported by enormous interest from institutional investors. The price range for the offer was ₹1,085-1,125 per share.
The three-day share sale opened for subscription on October 28 and settled on November 1. The IPO comprised of equity shares aggregating up to ₹630 crores (new issue) and an offer for sale (OFS) of up to 41,972,660 equity shares by promoters or current shareholders. Many brokerages had advised subscribing to Nykaa’s public issue for the long-term.
Established in 2012 by previous investment banker Falguni Nayar, as of August 31, 2021, Nykaa had combined downloads of 55.8 million across all their mobile applications. Unlike most startups, Nykaa has also achieved profitability, posting a consolidated net profit of ₹61 crore for the year ended March 31, 2021 (FY21), as compared to a loss of ₹16.3 crore in FY20.
The firm has a diverse portfolio of beauty, personnel care and fashion products, including its owned produced brand products under its two business verticals – Nykaa and Nykaa Fashion.
Nykaa stated it plans to use the gains from the IPO for expansion by setting up new retail shops and building new warehouses. The e-commerce beauty giant also intends to eliminate some of its debt, which should bring down interest costs and further shore up its profitability.