Nykaa IPO opens for public subscription on Thursday; price band fixed at Rs 1,085-1,125 per share

The initial share sale of FSN E-Commerce Ventures, which runs an online marketplace for beauty and wellness products Nykaa, is set to open for public subscription on October 28.

The company plans to raise Rs 5,351.92 crore through its public issue at the upper price band. The price band has been fixed at Rs 1,085-1,125 a share. The e-commerce venture is promoted by Falguni Nayar and backed by private equity firm TPG. The three-day initial public offering will conclude on November 1, according to the red herring prospectus (RHP).

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The IPO comprises a fresh issue of equity shares worth Rs 630 crore and an offer for sale (OFS) of 4.19 crore shares by promoters and existing shareholders, it added. Earlier, the fresh issue size was Rs 525 crore.

Those selling shares in the OFS are -- promoter Sanjay Nayar Family Trust and shareholders --TPG Growth IV SF Pte Ltd, Lighthouse India Fund III, Limited, Lighthouse India III Employee Trust, Yogesh Agencies & Investments, JM Financial and Investment Consultancy Services and some individual shareholders.

The company received Sebi's approval on October 11 to launch the initial share sale.

According to the draft papers, the company plans to use the proceeds from the IPO 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.

In addition, the company is planning to deploy the proceeds of the IPO for marketing and promotional activities to focus on strengthening its 13 brands, such as Nykaa Cosmetics, Nykaa Naturals and Kay Beauty along with establishing and promoting new brands.

FSN E-Commerce Ventures Ltd, founded in 2012 by Falguni Nayar, is a digitally native consumer technology platform, delivering a content-led, lifestyle retail experience to consumers.

The company has a diverse portfolio of beauty, personnel care and fashion products, including its owned manufactured brand products, under its two business verticals Nykaa and Nykaa Fashion.

The company has reported a net profit of Rs 61.94 crore for FY21 compared to a net loss of Rs 16.34 crore in FY20. Its revenue from operations jumped to Rs 2,441crore in FY21 from Rs 1,768 crore in FY20.

It clocked nearly 57 per cent CAGR in gross merchandise value (GMV) from FY19-21 and more than 48 per cent CAGR in revenue terms from FY19-21.

The company is one of the leading influential lifestyle platforms in India with over 12.6 million followers across leading social media platforms as of March 2021.

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 equity shares of the company will be listed on the BSE and NSE.