The initial public offering of Nykaa owner FSN E-Commerce Ventures has been subscribed 1.55 times so far on October 28, the first day of bidding. The offer has received bids for 4.09 crore equity shares against the IPO size of 2.64 crore equity shares.
Nykaa IPO opened for subscription on October 28 at the price band of Rs 1,085-1,125 per share. It will conclude for bidding on November 1. The company raised close to Rs 2,400 crore from anchor investors ahead of the bidding process.
Retail investors have put in bids for 3.50 times their reserved portion. Whereas the non-institutional subscribers put in bids 60 percent of their reserved portion. Qualified institutional buyers have bought 1.39 times of their reserved portion. The employee portion of the IPO was subscribed 49 percent of the portion set aside for them.
The company aims to use the proceeds from the issue to set p new retail stores, invest in Nykaa Fashion, establish warehouses, and other capital expenditure investments.
Brokerages have recommended subscribing to the IPO as the company has a first-mover advantage and bright future prospects. "Considering the future prospect for the company and it being placed at a sweet spot as the first-mover advantage, we assign a "subscribe-long term" rating to this IPO," Anand Rathi said in a report.
With a diverse assortment of beauty, personal care and fashion products, Nykaa’s supremacy lies in its ability to retain and attract customers, Yesha Shah of Samco Securities said.
"Nykaa has witnessed sustained growth in GMV over the years and has the highest AOV. Its robust technology and content engine, focus on capital efficiency and positive unit economics coupled with immense headroom for penetration, provide the company with a long runway for growth. The dearth of PAT positive new-age companies in India and its first-mover advantage augurs well enabling Nykaa to command a higher premium," Shah added.
"We believe the company is capable of improving its financial metrics and cementing its position going forward and hence recommend investors to Subscribe to the issue," she said.
Motilal Oswal also recommended subscribing to the IPO, especially investors with a high-risk appetite. "Investors with a high-risk appetite can subscribe for listing gains given fancy for unique and first of its kind listing in the e-commerce space," Motilal Oswal said in a report.
(Edited by : Yashi Gupta)
First Published: IST