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Nykaa IPO subscribed 24 times on the last day: Know what GMP is proposing

Nykaa IPO subscribed 24 times on the last day: Know what GMP is proposing

Key highlights

  • The initial public offering (IPO) of Nykaa and Nykaa fashion operator FSN E-Commerce Ventures was subscribed 24 times on day 3
  • Qualified institutional investors (QII) offer 18 times the proportion intended for them
  • Non-institutional investors bought 46 times the shares against their reserved portion

New Delhi: The initial public offering (IPO) of FSN E-Commerce Ventures Ltd, which operates the online marketplace for beauty and wellness products Nykaa, was closed by January 1.

According to subscription data, the offer received offers for 63.63 billion shares with an IPO volume of 2.64 billion shares.

Qualified institutional investors (QII) have bid 18 times their designated share and non-institutional investors bought 46 times the shares against their reserved share. A portion reserved for retail investors was subscribed 10 times and that by employees was subscribed 1.64 times.

The new age company has a solid premium of Rs 570 apiece, which is more than 50 percent of the issue price. The unofficial market premium fizzled slightly from Rs 600 after the sharp drop in the secondary market led by FII sales and disappointing Q2 results.

Kotak Mahindra Capital, Morgan Stanley India, BofA Securities India, Citigroup Global Markets India, JM Financial and ICICI Securities are commercial banks at the time of issue.

“Given the scale of operations, a strong management team, profitable company, and high growth prospects in the industry due to high under-penetration, we believe the company created an industry on its own. Therefore, we recommend “subscribing” on the issue for both a listing profit and long term, “suggested Hem Securities.

The company plans to use the proceeds from the IPO to expand by building new retail stores and new warehouses. It also plans to reduce some of its debt, which should lower interest costs and further boost its profitability.

Brokerage firm Prabhuas Lilladher has recommended a ‘Subscribe’ rating for the IPO of FSN E-Commerce Ventures, which operates Nykaa. “We believe Nykaa’s entry into the fashion segment looks promising, with a focus on premium customers, a curated and managed marketplace with over 1.8 million SKUs, private labels such as NYKD, Pippa Bella, 20 dresses and an industry leading AOV of Rs 3977 and one Contribution of ~ 25% to GMV in 5MFY22, “the note reads.

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