The much-anticipated initial public offering (IPO) FSN E-Commerce Ventures Limited, the parent company of online beauty and lifestyle products aggregator Nykaa, will open for subscription on October 28.

A lot of buzz has been seen in the market regarding Nykaa’s public issue as it will be the second Indian tech startup that will go public after online food delivery giant Zomato.

Read | 2 IPOs to open for subscription this week: All you need to know

NYKAA IPO SIZE, PRICE BAND, KEY DATES, GMP & OTHER KEY DETAILS

The company’s public issue will open for subscription on October 28 and investors will be able to place their bids till November 1. Anchor subscriptions, if any, will open a day before the public issue opens for subscription.

The company plans to raise as much as Rs 5,352 crore from the IPO and will be one of the largest in 2021 so far. It may be noted that FSN Ventures is backed by private equity firm TPG and promoted by Falguni Nayar.

The Nykaa IPO comprises a fresh issue of equity shares worth Rs 630 crore and an offer for sale (OFS) of 4.19 crore equity shares by existing shareholders including promoters and marquee investors.

It is worth mentioning that promoter Sanjay Nayar Family Trust will sell up to 48 lakh equity shares through OFS. However, Falguni Nayar and her family will continue to own a majority stake after the IPO. Key investor TPG Growth IV SF Pte Ltd and Lighthouse India Fund III will sell over 54 lakh equity shares and 48 lakh equity shares, respectively.

Some other investors are also expected to offload shares through OFS. Meanwhile, the company has reserved 2.5 lakh equity shares of the total issue size for employees.

The price band of the Nykaa IPO has been fixed at Rs 1,085-Rs 1,125 per equity share. One lot will consist of 12 shares and is expected to cost Rs 13,500. The maximum lot size (14) will consist of 168 shares and is expected to cost Rs 1,89,000.

At least 10 per cent of the issue has been reserved for retail investors, while 75 per cent has been reserved for qualified institutional buyers and the rest 15 per cent for non-institutional investors.

Nykaa shares are available on the grey market at a premium of over Rs 600, according to market observers quoted in a livemint.com report. This indicates that the IPO is likely to receive a good response. The shares of the company are likely to be listed on the Bombay Stock Exchange and the National Stock Exchange on November 11. The allotment of shares is likely to be finalised on November 8.

OBJECTIVES OF NYKAA IPO

The proceeds from the issue will be used by the company to invest in its fashion and other brands. It also plans to invest and set up new retail stores. The company also plans to utilise the raised money for capital expenditure and investment in subsidiaries.

The generated funds will also be used for repayment of debt availed by the company and its subsidiary Nykaa E-Retail, besides enhancing brand awareness and visibility.

NYKAA DETAILS & FINANCIALS

FSN E-Commerce, the parent firm of Nykaa, was incorporated in 2012 by Falguni Nayar. It offers a diverse range of products through its online and offline platforms and is one of the few profitable online beauty, personal care and fashion products aggregators in the country.

While the bulk of its business revolves around online orders and delivery, it also operates offline with 80 stores across approximately 40 cities in the country. As of August 2021, Nykaa Fashion comprised 1,434 brands and 2.8 million stock-keeping units (SKUs) with fashion products for women, men, kids and home.

Nykaa posted a net profit of over Rs 61 crore in FY21 compared to a loss of over Rs 16 crore in FY20. Its revenue from operations has recovered as economic activities resumed after the pandemic. It may be noted that revenue grew 38 per cent year-on-year to Rs 2,453 crore in FY21.