Perspective on Nykaa IPO listing By Ms. Sneha Poddar, Motilal Oswal Financial Services
Below is Perspective on Nykaa IPO listing By Ms. Sneha Poddar, AVP Retail Research, Motilal Oswal Financial Services
Nykaa, the largest specialty beauty and personal care (BPC) Platform in India, had a stellar debut today on the bourses – listing at 79% premium at Rs2018 (vs IPO price of Rs1125) with market cap hitting Rs1lakh crore. It is the first of its kind listing in the e-commerce space and thus garnered lot of interest, validated from IPO subscription of 82x. It is one of the very few profitable new-age company and is the first women led unicorn which also attracted lot of investor interest. Apart from leadership in online BPC in India, Nykaa is also one of the fastest growing fashion platforms in India based on GMV (Gross Merchandise Value). Nykaa’s key strengths lies in its inventory-led business model for BPC segment, which allows it to offer authentication for all its products and ensures availability and efficient distribution. The online BPC market is highly underpenetrated at just 8% in India and is growing at a very fast pace of 60% p.a. over CY16-20. Given 35% market share of Nykaa in online BPC, we believe Nykaa is rightly placed to tap the high growth digital/online penetration in BPC/Fashion market. We like Nykaa given its leadership position in online BPC market, customer centric approach, profitable tech platform and capital efficient business model.”
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