Nykaa IPO Review: After a short break, IPO’s are once again back! FSN E-Commerce Ventures is the company behind the online shopping brand for beauty and wellness products Nykaa. The IPO will be open from October 28th to November 1st. The company aims to raise ₹5351.92 Cr through the public offering.
In this article, we look into important information on the Nykaa IPO. We also will find out the possible prospects of the company. Keep reading to find out!
Table of Contents
About the Company
Founded in 2012, by former investment banker Falguni Nayar, FSN E-Commerce Ventures is a leading digital consumer technology platform that runs Nykaa and Nykaa Fashion. The company’s early entry into online beauty and personal care has allowed it to quickly boost its presence in India’s fashion space. The company is also backed by private equity firm TPG.
The company has a diverse portfolio of beauty, personal and fashion products. In addition to this, the company also sells its own products. They sell their products through two verticals. The first for beauty and personal care sold through Nykaa. The second is apparel and accessories which are sold through the Nykaa Fashion channel.
The company started off by selling multiple brands of products in its online space and then introduced its own flagship brand along with physical retail stores. Its online marketplace has over 4,078 brands! This makes inventory one of the most important aspects of the business. As of August 2021, the company had 3.1 million SKUs (stock-keeping units).
The company also has produced attractive financials over the last few years. Over the last 3 years, the company’s profits increased from Rs 1,116.3 Crore in FY19 to Rs 2,452.6 Crores in FY21. Nykaa also turned from loss-making to a profit maker. The company reported a net profit of ₹61.9 crores for FY21 as compared to a loss of ₹16 crores in FY20.
The company’s online channels include mobile apps, websites, and mobile sites. Mobile applications accounted for 86.7% of its online gross merchandise value. As of March 2021, the company had cumulative downloads of 43.7 million across all mobile applications.
In the offline space, the company runs 80 stores across 40 cities in India over three different formats, as of August 2021. Overall the beauty and personal care segment in the E-commerce category has only 8% penetration making it one of the most underpenetrated categories in E-commerce. This gives Nykaa huge scope for growth!
Key IPO Information
The promoters of the company are Falguni Nayar, Sanjay Nayar, Falguni Nayar Family Trust and Sanjay Nayar Family Trust. The IPO includes an offer for sale of Rs. 4,721.92 Cr. A total of 16 shareholders will be selling their stakes.
These include Falguni Nayar, Sanjay Nayar, TPG and Lighthouse, Sunil Kant Munjal, Harindarpal Singh Banga, along with Indra Banga, Narotam Sekhsaria, Rishabh Mariwala, Jeenoo Khakhar, along with Kanika Khakhar and Isha Khakhar, Michael Carlos, Samina Hamied, Sanjay Maliah, Vikram Sud, and Karan Swani.
They have appointed Kotak Mahindra Capital Company, Morgan Stanley India Company, BofA Securities India, Citigroup Global Markets India, JM Financial and ICICI Securities as lead managers to the issue. Link Intime India Private Ltd has been appointed as registrar to the issue.
| Particulars | Details |
|---|---|
| IPO Size | ₹5,351.92 Cr |
| Fresh Issue | ₹630.00 Cr |
| Offer For Sale(OFS) | ₹4,721.92 Cr |
| Opening Date | Oct 28, 2021 |
| Closing Date | Nov 1, 2021 |
| Face Value | ₹1 per equity share |
| Price Band | ₹1085 to ₹1125 per equity share |
| Lot Size | 12 Shares |
| Minimum Lot Size | 1 |
| Maximum Lot Size | 14 |
| Listing Date | Nov 11, 2021 |
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Purpose of the IPO
The company is opting for IPO for the following purposes
- Investment of ₹ 42crores in certain of their subsidiaries, namely, FSN Brands and / or Nykaa Fashion for funding the set-up of new retail stores;
- ₹ 42crores towards capital expenditure to be incurred by the company and investment in certain of their subsidiaries, namely, Nykaa E-Retail, Nykaa Fashion and FSN Brands for funding the set-up of new warehouses;
- ₹ 1,56 crores towards repayment or prepayment, of outstanding borrowings availed by the company and one of their subsidiaries, namely, Nykaa E-Retail;
- Expenditure of ₹ 2,34 crores to acquire and retain customers by enhancing the visibility and awareness of the brands; and
- General corporate purposes.
In Closing
In this post, we covered the Nykaa IPO Review. The Initial Public Offering opens on 28th October and closes on 1st November 2021. For retail investors, it can be a good opportunity to look into the company’s future prospects and apply for the IPO if they believe in the products and growth prospects of the company.
Do let us know what you think of the Nykaa IPO review. Are you planning to apply for this IPO or not? Comment below. Cheers!
Aron, Bachelors in Commerce from Mangalore University, entered the world of Equity research to explore his interests in financial markets. Outside of work, you can catch him binging on a show, supporting RCB, and dreaming of visiting Kasol soon. He also believes that eating kid’s ice-cream is the best way to teach them taxes.
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Small correction, you have mentioned “Over the last 3 years, the company’s profits increased from Rs 1,116.3 Crore in FY19 to Rs 2,452.6 Crores in FY21”