Bumper Listing: It’s a dashing debut for Nykaa

November 11, 2021 3:30 AM

Nayar said on Wednesday she had been excited at the prospect of turning entrepreneur and having worked to get so many companies listed on the exchanges, it was a “fantastic feeling” to own a listed player.

The stock hit an intra-day high of Rs 2,248.10 and closed the session at Rs 2,206.70. The IPO had been subscribed a whopping 82 times.The stock hit an intra-day high of Rs 2,248.10 and closed the session at Rs 2,206.70. The IPO had been subscribed a whopping 82 times.

By Ruchit Purohit & Yoosef KP

Fashion and cosmetics retailer Nykaa on Wednesday made a sizzling debut on the bourses, listing at Rs 2,001 on the BSE, a huge premium over the issue price of Rs 1,125.

The e-commerce player commands a market capitalisation of Rs 1.04 lakh crore, and is the country’s 52nd most valuable company ahead of Coal India, SBI Cards, Hindalco Industries, Godrej Consumer Products and BPCL. There are 11 companies in the Nifty50 whose market cap is smaller than that of Nykaa.

The stock hit an intra-day high of Rs 2,248.10 and closed the session at Rs 2,206.70. The IPO had been subscribed a whopping 82 times.

Nykaa is promoted by former investment banker Falguni Nayar, who is also the CEO, and owns about half of the company. According to Bloomberg, Nayar’s stake is worth about $6.5 billion, given the 89% surge in the stock.

The company is among the few profitable ventures in the e-commerce space and reported sales of Rs 2,441 crore in FY21 and a net profit of Rs 62 crore. The stock now trades at an EV/Ebitda of 640 times based on FY21 earnings; Infoedge, IndiaMart and Just Dial trade at multiples of 287x, 61x and 45x respectively, Bloomberg data showed.

The tremendous response to the Nykaa IPO is backed by the belief the beauty and personal care (BPC) story is a compelling one, both in terms of bigger spends and the increase in online penetration. Analysts at HSBC estimate the total BPC spend in India at $15 billion, or around 1.7% of the total retail basket. They expect BPC spends to grow at a compounded 13% in the next five years, led by rising per-capita income and the growing share of BPC in private consumption spends.

Nayar said on Wednesday she had been excited at the prospect of turning entrepreneur and having worked to get so many companies listed on the exchanges, it was a “fantastic feeling” to own a listed player.

Founded in 2012, the company currently operates two business verticals, Nykaa and Nykaa Fashion. The company proposes to utilise the money from the IPO to set up retail stores and warehouses. It also plans to repay debt and use the funds for marketing and promotions.

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