Nykaa IPO shares listing day strategy: Listing tomorrow, grey market premium soars; buy, sell, hold?

By: |
November 09, 2021 2:34 PM

Nykaa, owned by FSN E-Commerce Ventures Ltd, whose IPO got 81.78 times subscription, is scheduled to make its stock market debut on Wednesday, 10 November 2021.

Nykaa, Nykaa IPO, initial public offeringsIn the primary market, Nykaa shares were quoting at a premium of 68 per cent over the issue price of Rs 1,125 per share

Nykaa, owned by FSN E-Commerce Ventures Ltd, whose IPO got 81.78 times subscription, is scheduled to make its stock market debut on Wednesday, 10 November 2021. The IPO received a stellar response from both institutional as well as retail investors. In the primary market, Nykaa shares were quoting at a premium of 68 per cent over the issue price of Rs 1,125 per share, according to the people who deal in unlisted shares of the companies. Nykaa has a diverse portfolio of beauty, personnel care, and fashion products including its owned manufactured brand products under its two business verticals, Nykaa and Nykaa Fashion. “Considering its prospects, investors can hold this stock for medium to long term, if allotted,” Likhita Chepa, Senior Research Analyst at CapitalVia Global Research, told Financial Express Online.

Nykaa’s valuations at the upper price band of Rs 1,125 come out to be 839.5 times price to earnings and 21.6 times FY21 sales and 16.2 times FY22 annualised sales, said an analyst. “It is clear that the valuations are expensive. However, unlike other startup listings this year, Nykaa has declared profits and is led by an exceptional promoter and promoter Group (Falguni Nayar and her family). They have grown in a way so as to create a sustainable business enterprise keeping profitability in mind,” Aditya Kondawar, COO, JST Investments, told Financial Express Online.

Nykaa IPO share listing: No fresh buying advised

Kondawar expects the company to do well in the market of beauty products. “If you were allotted the shares, they can be held, but fresh buying is not advised at this juncture. Also, one must closely track the competitive intensity of their sector and see how they navigate those challenges,” Kondawar advised.

Nykaa IPO shares may list at Rs 1,850

Nykaa is planning to deploy the proceeds of the IPO for marketing and promotional activities, to focus on strengthening its 13 owned brands such as Nykaa Cosmetics, Nykaa Naturals, and Kay Beauty along with establishing and promoting new brands. Amongst the spree of startup IPOs that are set to list, Nykaa got a magnificent response as compared to others. Analysts said that Nykaa, being a profitable startup, became a favorite choice for the investors. “We think quality management and under penetration in beauty and personal care products in the e-commerce category makes Nykaa an attractive bet for long-term in spite of pricey valuations. Owing to great subscription, a ‘beautiful’ listing is on cards. We expect Nykaa to list in the range of Rs 1800-1850 apiece and won’t be surprised if it crosses Rs 1,900 mark on listing rewarding hefty gains to allottees on the listing,” Abhay Doshi, Founder, UnlistedArena.com, dealing in Pre-IPO & Unlisted Shares, told Financial Express Online.

(The stock recommendations in this story are by the respective research analysts and brokerage firms. Financial Express Online does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1RateGain Travel IPO opens for subscription; check issue price, GMP, other details here
2Metro Brands sets IPO price band at Rs 485-500 /share
3Anand Rathi Wealth IPO subscribed 9.78 times