Nykaa IPO Oversubscribed ; Should new investors subscribe or avoid

 Nykaa IPO Oversubscribed in one day; Should new investors subscribe or avoid

Naykaa IPO Oversubscribed ; Should new investors subscribe or avoid

Nykaa is an Indian e-commerce company, founded by Falguni Nayar in 2012 in Mumbai. It sells beauty, wellness and fashion products.

Nykaa's initial public offering (IPO) received overwhelming response from investors. Retail investors and qualified institutional buyers (QIBs) were the most active users of the issue.

Nykaa IPO got a very strong positive response from investors, being fully subscribed on the day of opening as till Monday the Naykaa company aims to raise Rs 5,352 crore in the primary market. 

JP Morgan, HDFC, Blackrock, ICICI, Nomura, Fidelity and Abu Dhabi Investment Authority a are some of the famous name of investors who invested in FSN e-commerce Ventures limited Naykaa's parent company at Rs 6500 in the grey market. 

Nykaa IPO is opened till  November 1, the IPO is likely to increase public shareholding from 45.8% to 47.4% and Promoters shareholding is likely to decline to 52.6% from 54.2%.

Retail investors were the first to fully subscribe their portion. So far retail investors have bid for 1.63 crore shares of Nykaa or 3.45 times their portion. Non-Institutional Investors (NII) have subscribed their portion 0.59 times while Employees of the firm have bid for 0.67 times the portion reserved for them.

Nykaa Financial Details

1) Nykaa as in March 2021 has total assets 8,970.02 which was 2,049.85 in March 2020.

2) Nykaa's liability has increased to 8,970.02 from 2049.85 as its expanding rapidly.

3) Cash increased from 221.48 to 1,895.58.

4) Revenue grew 38% year on year to Rs 2,453 crores in FY21. The company had earlier said it would Rs 130 crore from the IPO proceeds to repay its debt and Rs 200 crore to market its brand.

Nykaa IPO seems prominent, its revenue grew drastically after its brand value increased, it will be overvalued P/E.  Talking about its shareholding it changes a lot public shareholding will increase whereas promoters shareholding is declining these will be an Offer For Sale (OFS)  by existing shareholders. 

Nykaa is a leading brand with good advanced technologies and its market share is estimated 18.5% . It is fundamentally strong. With the growing adoption of consumer internet businesses in India, the market is outshining its traditional peers in terms of growth and return on investment.
This has attracted the attention of the regulators as well as large-cap companies such as Reliance Industries and the TATA group.

New Investors needs to understand that thinking themselves is necessary before taking any advice. Nykaa IPO is a go for investors.

Warning for new Investors: Taking advice from third party can leads to a great loss, before taking any advice think carefully. 

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