NYKAA IPO

IPO Details:

Price Band: 1085-1125

Cutoff Price: 1125

About Company:

is a digitally native consumer technology platform, delivering a content-led lifestyle retail experience to consumers. Since incorporation in 2012, the company has invested both capital and creative energy towards designing a differentiated journey of brand discovery for our consumers. Nykaa has a diverse portfolio of beauty, personal care and fashion products, including their owned brand products manufactured. As a result, the company has established themselves not only as a lifestyle retail platform but also as a consumer brand. Nykaa offer consumers an Omnichannel experience with an endeavor to cater to the consumers’ preferences and convenience.

Competitive Strengths:

1. One of India’s leading lifestyle focused consumer technology platform

2. Nykaa is the preferred destination for luxury and prestige products in India for consumers and brands

3. Resilient, capital efficient business with a combination of strong growth and profitability

4. Proprietary technology stack

5. Founder-led company supported by a professional management team.

Strategies:

1. Continue to acquire new consumers and increase consumer loyalty

2. Deepen and broaden our brand relationships

3. Leveraging on art of retailing to expand into lifestyle adjacencies and launch new channels

4. Further expand Omnichannel capabilities

5. Invest in their owned brand portfolio

6. Focused, selective international expansion as well as acquisitions and joint ventures in India

Financial Performance:

Revenue is increasing and company became net profitable in FY21. With EPS of 1.39, the company's P/E is 809. This is crazy valuation for an IPO and highly overvalued.

Objects of the Issue:

The Net Proceeds from the Issue are proposed to be utilised in the following manner:

1. Investment in certain subsidiaries: FSN Brands and / or Nykaa Fashion for funding the set-up of new retail stores

2. Capital expenditure to be incurred by our company and investment in certain of our Subsidiaries

3. Repayment or prepayment, in full or in part, of certain borrowings availed by our company and one of our Subsidiaries

4. Expenditure to acquire and retain customers by enhancing the visibility and awareness of our brands

5. Offer for Sale

Competitors Comparison:

There are no listed competitors of Nykaa.

Grey Market Premium:

Our view: GMP of the IPO is good but valuations is very high. I will apply for this IPO only for listing gains.

Disclaimer: Views are shared for an educational purpose. Please consult your financial advisor or planner before taking any action based on the views or facts shared on this blog.

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