Shares of Nykaa made a strong debut on the Indian bourses on Wednesday, as the shares of the company began trading at a premium of over 82% at ₹2,054 per share on the NSE, above its IPO price of ₹1,125 apiece. Also, Nykaa shares are listed at ₹2,063 on the BSE, with the market cap exceeding ₹1 lakh crore.
The initial public offering of FSN E-Commerce Ventures Ltd, which operates the Nykaa online marketplace for beauty and wellness items, was oversubscribed 81.78 times on the penultimate day of subscription, owing largely to institutional investors’ strong interest. The offer price ranged from $1,085 to $1,125 per share.
The subscription period for the three-day share sale began on October 28 and ended on November 1. The IPO included a fresh issue of up to 630 crore worth of equity shares, as well as an offer for sale (OFS) of up to 41,972,660 equity shares by promoters or existing shareholders. Many brokerages advised long-term investors to subscribe to Nykaa’s public offering.
Ex- investment banker Falguni Nayar, the founder of Nykaa, has become a self-made billionaire woman. As of August 31, 2021, Nykaa app was downloaded by 55.8 million users. Unlike most startups, Nykaa is booking profits, posting a consolidated net profit of ₹61 crore in FY21 as compared to a loss of ₹16.3 crore in FY20.
The company has a diverse portfolio of beauty, personnel care and fashion products, which also includes its owned manufactured brand products under its two business verticals — Nykaa and Nykaa Fashion.
Nykaa has decided to use the proceeds from the IPO for expanding the business by setting up new retail stores and building new warehouses. The e-commerce beauty giant also wished to settle some of its old debt, leading to bringing down interest costs, and increasing its profitability.