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Nykaa: India's First Women-led Profitable Unicorn's Valuation Surges to Rs 1 lakh Crore

Nykaa listing had increased the company valuation to Rs 1-lakh-crore mark

Nykaa listing had increased the company valuation to Rs 1-lakh-crore mark

Started by Falguni Nayar in 2012, Nykaa is one of the prominent online market place for beauty and personal care products. It is among very few profit-making market place

Nykaa made a bumper listing on share market on Wednesday, November 10. Nykaa shares opened at Rs 2,001 on BSE, an increase of 77.87 per cent premium over the higher end of the issue price. With this stellar listing, the valuation of India’s only profitable online market place, surged near $13 billion. The unique business model, healthy market share of beauty product and cosmetic brands, helped Nykaa maiden offer to garner a lot of attention from the investors. Nykaa IPO received bids of over 216.59 crore shares against the total issue size of over 2.64 crore shares, data available with the National Stock Exchange (NSE) showed. Nykaa IPO was subscribed whopping 82 times. The portion for qualified institutions bidders subscribed over 91 times while the quota reserved for non-institutional buyers’ quote received bids for 112 times. The portion set aside for retail subscribers, was booked over 12.24 times.

On NSE, Nykaa stock opened made a debut at Rs 2,018, up over 79.83 per cent. The share price to the higher end of the Nykaa initial public offering (IPO) of Rs 1,125, had increased the company valuation to Rs 1-lakh-crore mark.

“Nykaa has a seen a strong listing due to positive market sentiment … since it is the only profit-making company in the digital space, it is receiving higher investor traction,” said Ajit Mishra, vice-president, research, Religare Broking. However, the startup’s valuations look expensive at these (levels) despite factoring in strong long-term growth prospects, Mishra added.

Started by Falguni Nayar in 2012, Nykaa is one of the prominent online market place for beauty and personal care products. Over the years, the online platform got investors including private-equity firm TPG, Fidelity and Indian celebrities Alia Bhatt and Katrina Kaif. Nykaa runs its online operations through mobile applications and websites along with 80 brick-and-mortar stores across the country, as of August 31.

With an overwhelming debut, Nykaa founder and CEO Falguni Nayar’s net worth jumped to new heights. The 58-year-old is now India’s richest self made woman billionaire. According to an AFP report, Nayar is now among one of the world’s wealthiest. Aftet stock listing, Nayar has joined Nykaa founder and CEO has joined only six other women billionaires in India Bloomberg Billionaires Index.

“I started Nykaa at the age of 50 with no experience. I hope the Nykaa journey can inspire each of you to be the Nykaa of your lives,” she said ahead of her company’s listing.

For investors, Jyoti Roy-DVP-equity strategist, Angel One Ltd suggested, “The Nykaa IPO received great response from investors and was subscribed 82 times which translated to a blockbuster listing for the stock. The stock is trading at an 80 per cent premium to the issue price of Rs 1,125. We had given a subscribe rating to the IPO. At current levels Nykaa is trading at price to sales of 38.9x of FY2021 revenue which is at a discount to Zomato (54xFY2021 revenues). Nykaa is one of the very few profitable Unicorns in India and we believe that the company is well positioned to benefit from the exponential growth in the online beauty and fashion retailing business over the next decade. Given the discount to Zomato we would recommend investors to remain invested in Nykaa from a long term perspective.”

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first published:November 10, 2021, 15:48 IST