Nykaa's Rs 5,352 cr IPO subscribed 5x; Fino Payments Bank garners 51%

Brokerages bullish on Nykaa given the firm's high growth potential

The initial public offering (IPO) of FSN Ecommerce Ventures, operator of online beauty startup Nykaa, was subscribed nearly five times on Friday. The issue IPO closes on Monday. The institutional investor category has so far garnered 4.8 times subscription; retail quota was subscribed 6.3 times subscribed. High networth individual (HNI) portion was subscribed 4.2 times.

On Wednesday, the company allotted shares worth Rs 2,396 crore to 174 anchor investors at the upper price band of Rs 1,125 per share. At the top-end, Nykaa is valued at Rs 53,200 crore ($7 billion).

Blackrock, Capital Group, Fidelity, Government of Singapore, SBI Mutual Fund, HDFC MF, Tiger Global and Nomura are some of the investors who got allotment in the anchor category.

Nykaa’s Rs 5,352-crore IPO is the biggest since that of online delivery firm Zomato. Nykaa had reported net profit of Rs 62 crore for the financial year 2020-21 (FY21) on revenues of Rs 2,440 crore.

Despite low profitability, most brokerages have a bullish view on the company given the high growth potential.

“Nykaa is likely to trade at a huge scarcity premium versus global peers in the online beauty and personal care space (trading at 3 times FY24E EV/sales average). We believe Nykaa could trade at one-year forward EV/sales of about 6-8 times, purely based on its core BPC offering,”Elara Capital said in a note.

FINO Payments Bank subscribed 51%

Fino Payments Bank IPO garnered 51 per cent subscription on Friday, the first day of the issue. The bank has set the price band at Rs 560-577 per share. The IPO comprises Rs 300 crore of fresh fund raise and Rs 900 crore of secondary share sale by promoter Fino Paytech. Fino Payments Bank’s parent Fino Paytech counts BPCL (22.9 per cent stake), Blackstone (15.1 per cent), ICICI Prudential Life (9.1 per cent), Intel Capital (5.7 per cent) as its shareholders. Fino’s IPO closes on Tuesday.