Wednesday, Aug 17, 2022

Nykaa Shares Make Dream Debut, List At Over 79% Premium. Should You Invest?

The stock debuted at Rs 2,001, reflecting a jump of 77.86 per cent on the BSE. It then zoomed 89.24 per cent to Rs 2,129.

Shares of FSN E-Commerce Ventures, which runs online marketplace for beauty and wellness products Nykaa, listed with a huge premium of over 79 per cent against the issue price of Rs 1,125 on Wednesday.

The stock debuted at Rs 2,001, reflecting a jump of 77.86 per cent on the BSE. It then zoomed 89.24 per cent to Rs 2,129.

On NSE, it listed at Rs 2,018, a premium of 79.37 per cent. The company's market valuation remained at Rs 97,754.06 crore on BSE.

The initial share-sale of FSN E-Commerce Ventures was subscribed 81.78 times earlier this month.

The Rs 5,352-crore IPO had a price range of Rs 1,085-1,125 per share.

The company 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.

Check what brokerage houses say:

Prabhudas Lilladher

The brokerage house has recommended subscribe rating to IPO of FSN E-Commerce Ventures which operates Nykaa.

Nykaa has revolutionized the art of online retailing of BPC products in India. It has been able to create strong consumer following and 70 per cent repeat purchase led by 1) Inventory led BPC Model which ensures authenticity and guarantee of quality 2) wide product range offered by Nykaa 3) 2 million stock keeping units', 3,826 brands and availability in 24,817 pin codes 4) consumer education through 1,363 influencers, 39,500 Facebook posts (12.6 million followers) and 1.1 million Youtube subscribers 5) Ability to bring global brands like Estee lauder, Huda Beauty, Charlotte Tilbury etc. to Indian consumers, 6) private labels like Nykaa Beauty, Nykaa Naturals, Kay Beauty.

Motilal Oswal

The ivestment firm said they liked Nykaa given its leadership position in online BPC market, customer centric approach, profitable tech platform and capital efficient business model. “We believe Nykaa is rightly placed to tap the high growth digital/online penetration in the BPC/Fashion market. We recommend Subscribe.”

Earlier, many analysts expressed positive market debut for the fashion retailer. This is what what analysts had said eariler before the cmpany made a market debut:

Ankur Saraswat, research analyst at Trustline Securities

Under a strong and profitable business model, the listing gain can be expected around Rs 750 per share or 66 percent over IPO price.

Aayush Agrawal, senior research analyst, merchant banking at Swastika Investmart

He expected Nykaa to get listed around Rs 1,600-1,700. ”Eyeing the recently listed new-edge business and Nykaa’s growth plan, we expect the company to perform much better,” he said.

Gaurav Hinduja, analyst at GEPL Capital

Nykaa was subscribed 81.78 times at the end of day three. Considering the massive investor interest, we expect around a strong 60 percent premium on listing.