Nykaa IPO subscription MASSIVE: Definitive guide to online platform's share sale

Nykaa IPO is on ts way and the anchor investors have taken to it in massive numbers. Nykaa is an online beauty e-commerce platform operated by FSN E-Commerce Ventures and it has fixed a price band of ₹1,085-1,125 per share for its initial public offer (IPO). Founders are likely targetting Nykaa valuation at over $7 billion. Nykaa IPO subscription opened today and the last day is November 1.

Nyka IPO Anchor Investors subscription

Nykaa IPO has generated some 60 times more bids from anchor investors than it intended to sell, according to people with knowledge of the matter, reported Bloomberg.

The Mumbai-based firm received bids worth about 1.5 trillion rupees ($20 billion) from large funds compared with almost 24 billion rupees ($320 million) offered, the people said, asking not to be identified as the information is private.

Who are the Top anchor investors in Nykaa IPO?

The Government of Singapore was the single largest of the lot, subscribing to 2.6% of the anchor book, followed by Canada Pension Plan Investment Board with 2.4% and Tiger Global with 2.3%, while Fidelity funds bought a combined 6.3%, according to an exchange filing from Nykaa late Wednesday.

Nykaa IPO at a glance

Nykaa IPO is made up of equity shares aggregating up to ₹630 crore (fresh issue) and an offer for sale of up to 41,972,660 equity shares (offer for sale or OFS) being put up by the shareholders. Existing investors like such as TPG Growth IV SF Pte, Lighthouse India Fund and others are expected to offload their shares too. Currently, over 50% shareholding in Nykaa is with the promoters, including founder and CEO Falguni Nayar.

Nykaa Growth Outlook

"We are one of India's leading consumer technology platforms... (with) more than 3 million SKUs from 4,000-plus brands and 13 million cumulative transacting consumer base...We do believe that there is a significant headroom available for growth at each level across India's digital use case funnel," said Nykaa CEO Falguni Nayar who is also the Executive Chairperson and Managing Director.

She explained that while the access to internet is very high at 660-690 million consumers, the online shopper base is still at just 150-180 million.

"This, we believe, is likely to go up over the next five years, with penetration reaching 24-28 per cent of the consumer base...beauty (segment) which is a USD 16 billion business is likely to grow to a USD 28 billion business going forward, and fashion which is a USD 54 billion business today is likely to become USD 124 billion business by 2025," she stated.

Nyka Profit

Nykaa had posted a net profit of ₹61.9 crore in FY21 compared to a loss of ₹16.3 crore in FY20. Its total income stood at ₹2,452.6 crore in FY21 as against ₹1,777.8 crore in FY20.

About Nykaa

Nykaa was founded in 2021 and is a digitally native consumer technology platform, delivering a content-led, lifestyle retail experience to consumers.

In FY2021, 17.1 million orders were placed on Nykaa's platform for beauty and personal care products with a total GMV of ₹33,804.1 million, a 35.3 per cent increase over FY2020.

Nykaa also has an offline retail presence in the form of 38 Luxe stores, 32 On-trend stores and 9 kiosks.

Where will Nykaa IPO proceeds go?

Nykaa will spend on the acquisition and retaining of customers by enhancing the visibility and awareness of its brands, repayment of outstanding borrowings and more.