Nykaa IPO was subscribed 4.32 times on the second day of issue

E-commerce beauty giant Nykaa’s Rs 5,352 crore initial public offering (IPO) was subscribed 4.82 times on the second day of issue, mostly on the back of high bidding by retail investors, according to subscription data on the stock exchanges. The beauty e-tailer’s IPO opened for bidding on Thursday, October 28, and will close for subscription on November 1.

On Friday, retail individual investors (RII) showed overwhelming interest as the portion reserved for them was subscribed 6.32 times – the highest among the three groups of investors. The portion set aside for the qualified institutional buyers or QIB was subscribed 4.72 times, while the portion reserved for the non-institutional individual investors was subscribed 4.17 times.

For the public offer, Nykaa has fixed a price band of ₹ 1,085-1,125 per share. Bids can be made for a minimum of 12 equity shares and in multiples of 12 equity shares thereafter up to 14 lots. A retail-individual investor can apply for up to 14 lots – 168 shares or Rs 189,000.

Founded by banker-turned-businesswoman Falguni Nayar, the beauty and fashion marketplace was incorporated in 2012 and is the country’s first woman-led unicorn. FSN E-Commerce Ventures – runs the beauty and personal care segment through Nykaa and the apparel and accessories vertical through Nykaa Fashion.

”Nykaa is the largest specialty beauty and personal care platform in India in terms of value of products sold in FY21.The mobile phone space in India has been significantly disrupted by smartphones in the last 5-6 years, driven by availability of low- cost alternatives from local as well as global brands.

The company at the upper band of the IPO is offered at 21.6x price to sales for FY21. The valuation of the IPO is rich, demanding a market cap of Rs. 532,040 million.

The company has a unique business proposition amongst its customer base and also has an aspirational brand image which augurs well in the long term

Considering the future prospect for the company and it being placed at a sweet spot as the first mover advantage we assign “Subscribe-Long Term” rating to this IPO,” domestic brokerage firm Anand Rathi said in its IPO note.

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