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Online cosmetics and fashion retailer Nykaa on Friday priced its initial public offering (IPO) at 1,085-1,125 a share, valuing the company at 52,574 crore ($7.4 billion) at the top end of the price range.

The share sale of Nykaa, run by FSN E-Commerce Ventures Ltd, will open for subscription on 28 October and close on 1 November. The company plans to list on the exchanges on 11 November.

On Thursday, the e-commerce platform said it plans to raise 630 crore by selling new shares in the IPO, more than the 525 crore it planned earlier. At the same time, existing shareholders reduced the number of shares they wanted to offload to 41.97 million from 43.11 million.

At the upper end of the price band, Nykaa is expected to raise around 5,352 crore.

The offer for sale comprises as many as 4.8 million shares by Sanjay Nayar Family Trust, 5.42 million shares by TPG Growth IV SF Pte, 4.84 million shares by Lighthouse India Fund III, 2.54 million shares by Yogesh Agencies and Investment, 914,000 shares by JM Financial and Investment Consultancy Services, 7.05 million shares by Sunil Kant Munjal, 10.2 million shares by Harindarpal Singh Banga jointly with Indra Banga, and 2.34 million shares by Narotam Sekhsaria.

Currently, Falguni Nayar Family Trust and Sanjay Nayar Family Trust hold 22.33% and 23.67% stake in the firm. TPG Growth owns 3.48%, while Lighthouse India Fund II holds 3.11%. Munjal owns 4.53% of Nykaa, while the Banga family has 8.7%.

Kotak Mahindra Capital, Morgan Stanley India, Bofa Securities, Citigroup Global Markets India, ICICI Securities, and JM Financial are managing the share sale.

Nykaa was founded in 2012 by investment banker Falguni Nayar. As of March 2021, it had cumulative downloads of 43.7 million across all mobile applications, and 86.7% of sales came through its mobile app.

On Friday, Nykaa also announced the acquisition of homegrown skincare brand Dot & Key for an estimated 96.9 crore, making it the first direct-to-consumer beauty brand acquired by the company.

Dot & Key—founded by Kolkata-based Suyash Saraf and Anisha Saraf—sells skin care products such as serums, face masks, toners and cleansers. The brand has recently expanded into nutraceuticals under the brand ‘IKWI’, whose products are dermatologically tested and cruelty-free.

Ankur Bisen, senior vice-president, retail and consumer at management consultant Technopak, said that Nykaa has evolved into an FMCG platform.

“They have built their own digital connect, and they are a retailer, but they also want to sort of grow offline because otherwise, they will face growth challenges. For that, you have to follow the principles of offline, i.e., appoint distributors, etc., either you can do it yourself or acquire brands that allow you to hit the ground running. These brand acquisitions also help you to bridge your price gap or offering gap," he said.

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