The Rs 5,352 crore IPO of FSN E-commerce Ventures, the parent company of beauty and fashion retailer Nykaa, is opening today i.e. on October 28. It can be subscribed till November 1. This is the third biggest IPO of this year after Zomato and Sona Comstar. In this IPO, fresh equity shares worth Rs 630 crore will be issued while promoters and existing shareholders will sell (OFS) 4.311 crore shares worth Rs 4,723 crore.
Issue price
The issue price of Nykaa is Rs 1085-1125 but the premium for its shares is running at Rs 670 in the gray market. This is 60 per cent higher than its higher price band. On Tuesday, Nykaa's unlisted shares were trading at Rs 1795 (1125+670) in the gray market. The valuation of the company is $ 7.11 billion i.e. Rs 53,200 crore. Nyka's shares may be listed on BSE and NSE on November 11. A minimum of 12 lots can be bid for.
What is a brokerage
Most of the brokerages have advised investors to buy it. But Marwadi Shares and Finance has advised investors to buy it with caution. It says there is no doubt that the company is one of the leading platforms in lifestyle consumer technology but its valuation is based on past financials. On the other hand, Hem Securities says that Nykaa has the potential to grow the beauty and personal care (BPC) market at 12 per cent annually till 2025. Similarly, the fashion market can grow at the rate of 18 per cent by 2025. At the same time, the company has shown strong growth without pumping cash. Brokerage says it can be bought for listing gain and long term.
Profitable etailers included
Nykaa is one of the few profitable etailers in India. Falguni Nayar, an investment banker, started Nykaa in 2012 and is today one of the top e-commerce sites for beauty products in the country. The company's revenue had increased to Rs 2,441 crore in the last financial year. During this, the company had earned a profit of Rs 61.9 crore. Kotak Mahindra Capital Company, Morgan Stanley, BofA Securities, Citigroup Global Markets, JM Financial and ICICI Securities are the merchant bankers for this IPO.
Rs 2,396 crore raised from anchor investors
Ahead of the IPO, FSN E-Commerce Ventures on Wednesday raised Rs 2,396 crore from 174 anchor investors. The company said in the information given to BSE that it has decided to allot 21,296,397 equity shares to anchor investors at a price of Rs 1,125 per share. Domestic investors include Aditya Birla Sun Life Trustee, SBI Mutual Fund, HDFC Trustee Company, Nippon Life India Trustee, Axis Mutual Fund, Kotak MF, ICICI Prudential, Franklin MF, Sundaram MF, IDFC MF, L&T MF, Tata MF, Edelweiss, and Includes UTI MF.
