FSN E-Commerce Ventures, the parent company of online beauty and wellness brand Nykaa, made a strong stock market debut on Wednesday with its shares trading at a premium and its market capitalization crossing the one trillion rupee mark.
Nykaa opened at 2,018 rupees a share on the National Stock Exchange, a premium of 79% over its issue price of 1,125 rupees per share. On the Bombay Stock Exchange, the stock opened at 2,001 rupees, a 78% premium against the issue price. At the time of closing bell, the shares had risen 96% at 2,207 rupees apiece.
The strong debut has made its promoter Falguni Nayar, who owns a 54% stake in the company, the country’s richest self-made female billionaire. Nykaa also attained the rare distinction of becoming the first Indian unicorn to be led by a woman. Nayar is a former investment banker who took to entrepreneurship at the age of 50.
The company’s initial public offering of 53-billion rupees drew strong investor interest and was subscribed 82.4 times. The institutional investor portion was subscribed 92 times, the wealthy investor portion 112.5 times, the retail investor portion 12.3 times, and the portion reserved for employees 1.8 times.
Through its initial share sale, Nykaa has raised 6.3 billion rupees, which will be used to increase its brand awareness, set up new retail stores and warehouses and repay its debt. The remaining 47.22 billion rupees was an offer for sale. Among the selling shareholders were promoter Sanjay Nayar Family Trust, TPG Growth, Lighthouse India Fund and JM Financials.
Incorporated in 2012, Nykaa is one of the fastest-growing fashion platforms. It has a dominant presence in the online beauty and personal care segment and its average order value is the highest among online sellers. It caters to over 5 million active users each month.
Nykaa has a dominant presence in the online beauty and personal care segment and its average order value is the highest among online sellers. It caters to over 5 million active users each month. Nykaa’s apparel and accessories platform is one of the fastest-growing brands in India. It also runs 80 brick-and-mortar stores across the country.
Analysts said investors are also drawn to Nykaa’s unique traits that are rare among start-ups. For starters the company is profitable. Nykaa had reported a net profit of 620 million rupees for the financial year 2020-21 (FY21) on revenues of 24.4 billion rupees and gross merchandise value of $540 million.