Nykaa Surges to Near Rs. 1 Lakh Crore Valuation in Blockbuster Debut

Shares of cosmetics-to-fashion platform Nykaa had a blockbuster opening on Wednesday, valuing the Indian company at nearly $13 billion (about Rs 96,686 crore), in the latest startup listing after food delivery firm Zomato’s stellar debut in July.

Shares of FSN E-Commerce Ventures, a profit making company hero brand, up 89.2 per cent to Rs. 2,129 after opening at Rs. 2018 in pre-open trade.

The first price was at a 79.4 per cent premium over the initial public offering (IPO) price of Rs. 1,125, giving the company a valuation of Rs. 95,437 crores.

The company’s offering last week drew bids worth $32.55 billion (about Rs 2,42,119 crore) as it was oversubscribed nearly 82 times, reflecting strong investor demand for a startup that, unlike many others, has already achieved profitability.

Ajit Mishra, Vice President (Research), Religare Broking said, “Nayaka has witnessed a strong listing due to positive market sentiment….

However, considering the strong long-term growth prospects, valuation of startups seems costly at these (levels), Mishra said.

Several high-profile Indian startups have already filed or are planning to file for IPOs, including ant groupbacked fintech firm Paytm, softbank-Supported Companies Hotel Aggregators Oyoride firm Hailstone, and logistics provider delhivery,

The listing comes at a time when companies are trying to capitalize on the Indian market, which has hit record highs on the back of a fall. COVID-19 cases, reopening of the economy and adequate liquidity.

Nykaa, which deals in two broad segments, namely Beauty & Personal Care and Apparel & Accessories, was incorporated in 2012 and is fast becoming a popular name among Indian consumers.

startup, whose investors include private-equity firms TPG, Fidelity and Indian Celebrities Alia Bhatt and Katrina Kaif, run their online operations through mobile applications and websites with 80 brick-and-mortar stores across the country as of August 31.

© Thomson Reuters 2021