Nykaa IPO Review

 From Unicorn to an oversubscribed IPO 

Experts give a thumbs up to the Public Issue 

Nykaa  IPO Subscribed 82 times on Final Day

* Nykaa IPO opened on October 28th 2021

* Banker turned entrepreneur, Falguni Nayar promoted Nykaa traded at ₹1725 per share in the grey market.  The upper price band of 1125 saw a massive premium of ₹600 or a 53.5 percent jump. 

* Though it is a bit highly priced, Experts have given a thumbs up. 

Reasons behind the strong fundamentals that resulted in the IPO’ resounding success:

* Nykaa’s strong brand image. 

* Highly efficient management team.

* Healthy Financials.

* A strong and robust business model. 

* Loyal customer base.

* It has leading market share in the beauty and personal care segment. 

* Innovative marketing strategies. 

* Effective brand marketing by the company. 

Nykaa  IPO, oversubscribed by 4.82 times  on Day 2.

The Nykaa and Nykaa fashion  operator  aims to garner  ₹5,351.92 crore.

It has mobilized ₹2,396 crore from anchor investors on 27th October. 

The offer comprises a fresh issue of ₹630 crore and an offer for sale of ₹4,721.92 crore  worth of shares  by the promoter and investors. 

The net proceeds from the fresh issue are going to be utilized for expansion and debt reduction, besides general corporate purposes. 

The price band for the offer has been fixed at ₹1,085-1,125 per equity share. 

” With a diverse assortment of beauty, personal care and fashion products, Nykaa’s supremacy lies in it’s ability to retain and attract customers. Nykaa has witnessed sustained growth in GMV(gross merchandise value) over the years and has the highest AOV(average order value)”, said Yesha Shah, Head of Equity Research at Samco Securities. 

It’s  robust technology and content engine,  focus on capital efficiency and positive unit economics, coupled with immense headroom for penetration, provide the company a long runway for growth. 

Yesha 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 “.

Personally I am very excited about becoming a retail investor of Nykaa. 

My reasons for supporting Nykaa are:

*Since many years, I have been their loyal customer. 

* Doorstep delivery of products adds convenience .

*I have never been disappointed with the quality of the products. 

*Very attractive offers from time to time make it budget friendly. 

* No more rushing to overcrowded market places and facing traffic. Shop from the comfort of home, specially during the Covid-19 pandemic. 

* The range of products is immense and readily available. 

* As I will continue to shop from Nykaa, for me personally its exciting to be a part of this public issue. 

Nykaa operates in beauty and personal care segment , Nykaa Fashion sells apparel and accessories. Both look quite robust and have a huge and exciting future. Sticky customers like me are definitely going to support and recommend the Nykaa IPO. 

Disclaimer: Views expressed by individuals. Due diligence is recommended while investing. 

Sources: Money control , mint. 

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