Nykaa IPO: The Rs 5,352 crore IPO of FSN E-Commerce Ventures, a company that owns Nykaa, is opening today.
The issue price band of Nykaa is Rs 1085-1125 per share. Accordingly, the valuation of the company is Rs 52,574 crore. The company will raise Rs 5,352 crore through IPO. It has a fresh issue of Rs 630 crore. Whereas shares worth Rs 4,197 crore will be sold in the offer for sale.
What should investors do?
Most brokerage houses have a positive view on the Nykaa issue and are recommending it to buy. However, Marwadi Shares and Finance has advised investors to invest cautiously. The brokerage firm has given the issue of Nykaa a “Subscribe with caution” rating.
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The company’s adjusted EPS after issue in June 2021 based on the previous 12 months is Rs 2.54. As per the issue price, Nykaa will be listed at 443.45 P/E and will have a market cap of Rs 53,204 crore.
The brokerage firm wrote in its report, “The company is a leading lifestyle focused consumer technology platform. It offers luxury and well-known brands to consumers and brands. However, the valuation of the company is determined on the basis of its past financial position. So investors should invest in it with caution.
About Nykaa Hem Securities says that Nykaa has a huge opportunity in the beauty and personal care market. Nykaa will grow at 12% annually till 2025. Along with this, the company has achieved better growth without giving much discount or discount.
The brokerage firm has said that Nykaa has established itself as an industry due to strong management team, scope of operations, profit growth and better opportunities in the beauty market. In such a situation, Hem Securities has advised to buy the issue of Nykaa.
2400 crore raised from anchor investors
A day before the issue opens, Nykaa has raised Rs 2400 crore from anchor investors. Anchor investors had bid 40 times more than Nykaa had reserved the portion for anchor investors.
Nykaa’s parent company FSN E-Commerce Ventures had reserved shares worth around Rs 2,400 crore for anchor investors. Investment firm BlackRock Capital Group and asset manager Fidelity made the biggest bid for these shares. Apart from this, many big global institutional investors including Canada’s largest pension fund manager CPPIB and Singapore’s sovereign wealth fund GIC participated in this bid.
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