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The initial public offering (IPO) of FSN E-Commerce Ventures, which runs online marketplace for beauty and wellness products Nykaa, is set to open for public subscription next week on Thursday, October 28. The three-day initial public offering will conclude on Monday, November 1.  The price band of the initial share sale is fixed at 1,085-1,125 per share.

The company had received Indian market regulator Securities and Exchange Board of India's (Sebi) approval to go ahead on October 11 to raise funds via the public offering.

Nykaa IPO details:

  • The three day share sale of Nykaa to launch on October 28 and close on November 1.
  • The initial share sale comprises a fresh issue of equity shares worth 630 crore and an offer for sale (OFS) of 4.19 crore shares by promoters and existing shareholders, it added., according to details in its red herring prospectus (RHP).
  • Falguni Nayar, Sanjay Nayar, Falguni Nayar Family Trust and Sanjay Nayar Family Trust are the promoters of the company.
  • Nykaa was founded in 2012 by Falguni Nayar, a former investment banker. Today, it is a leading multi-brand beauty & personal care platform in India and has been ramping up its presence in the fashion space.
  • The company plans to use IPO proceeds for expansion, by setting up new retail stores and establishing new warehouses. It also plans to retire some of its debt, which should bring down interest costs and further shore up its profitability.
  • Those selling shares in the OFS are its promoters Sanjay Nayar Family Trust and shareholders including TPG Growth IV SF Pte Ltd, Lighthouse India Fund III, Limited, Lighthouse India III Employee Trust, and some individual shareholders.
  • The company reported a net profit of 61.9 crore for FY21 as compared to a a loss of 16 crore in the previous fiscal. Its revenue from operations jumped to 2,441 crore from 1,768 crore.
  • As of March 2021, the company had cumulative downloads of 43.7 million across all mobile applications and 86.7% of its online gross merchandise value came through its mobile applications.
  • Kotak Mahindra Capital Company, Morgan Stanley India Company, BofA Securities India, Citigroup Global Markets India, JM Financial and ICICI Securities are merchant bankers to the issue.
  • The firm plans to list on 11 November on the leading stock exchanges BSE and NSE.

After a small pause, primary market is set to witness mega startup IPOs. “As the countdown of Nykaa IPO begins, market looks passionate for the company as unlike the cash burning and loss-making startups, Nykaa is a profitable one. With approx. 8% penetration, beauty and personal care segment in E-commerce category is one of the most underpenetrated segment compared to matured e-tailing categories providing huge scope for start-ups like Nykaa," said Abhay Doshi, founder, UnlistedArena.com. 

Promoters quality, profitability & growth and fancy for startup IPOs will be the driving force for Nykaa IPO, added Doshi.

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