Shares of Nykaa are going to make their Dalal Street debut on Wednesday, November 10. The company was earlier scheduled to list on Thursday. The counter is commanding a strong premium in the grey market, signalling a blockbuster listing of the new-age startup.
Shares of FSN E-commerce Ventures are available at a hefty premium of Rs 760-780 apiece, which is about 70 per cent more than its price range of Rs 1,085-1,125 per share.
Abhay Doshi, co-founder, UnlistedArena, said investors who get allotment are likely to gain from a strong listing pop. This is an ideal startup to be invested in, and deserves expensive valuation. “Nykaa boasts efficient and quality management, robust cash flows and strong prospects for future growth,” the avid grey market tracker added. “However, it is not a buy and forget story. Investors should review it periodically.”
The Nykaa IPO opened for subscription from October 28-November 1, 2021. The company raised Rs 5,352 crore from its primary stake sale.
Aayush Agrawal, Senior Research Analyst-Merchant Banking, Swastika Investmart, said Nykaa would be listed in the range of Rs 1,600-1,700, considering its current grey market premium. “Eyeing the recently listed new-age business and Nykaa’s growth plan, we expect the company to perform much better,” he added. “We recommend investors to stay invested in the IPO as it can be a wealth creator in the next 2-3 years.”
The popular e-commerce platform in India received bids of over 216.59 crore shares against an issue size of 2.64 crore shares, data available with the National Stock Exchange (NSE) showed. The issue was subscribed 82 times, with the portion for qualified institutions bidders subscribed over 91 times, while non-institutional buyers’ quote received bids 112 times more than the quota. Retail bidders’ portion was subscribed over 12.24 times.
Harshad Chetanwala, co-founder of MyWealthGrowth.com, said companies like Nykaa offered unique propositions and have raised money to further grow their business. “Investors should evaluate any new aspects of the company — like the prospect and strengths of the business, plans of promoters after listing, utilisation of capital and valuations of the company — before taking any decision,” said Chetanwala, who has made known his preference for a long-term play.
Nykaa is India’s biggest online marketplace for beauty, personal care and fashion brands. The company delivered 17.1 million orders in FY21 and operates 80 offline stores in 40 cities across India.
Ankur Saraswat, Research Analyst, Trustline Securities, said the company has an omni-channel approach to enhance brand contribution and would further upscale this proposition with fresh funding. “Nykaa will most likely look at achieving overall profitability this year as consumers shift towards digital interactions, boosting its business,” he added.
