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Below is quote on FSN E-Commerce Ventures (Nykaa) IPO by Mr. Jyoti Roy - DVP- Equity Strategist, Angel One Ltd

FSN E-Commerce Ventures (Nykaa) is coming out with an IPO of Rs. 5,184-5,352 crore at a price band of Rs. 1085-1125. The IPO will consist of an offer for sale of 41.97 crore shares and fresh issue of shares amounting to Rs 630 crores. The issue opens on 28th Oct 2021 and closes on 1st Nov 2021. Incorporated in 2012, Nykaa is a digitally native consumer technology platform, delivering a content-led, lifestyle retail experience to consumers. Nykaa has a diverse portfolio of beauty, personal care and fashion products, including their owned brand products manufactured by them. Nykaa offers its products through both online and offline channels. Naykaa is catering to the fast growing beauty and personal care market which is estimated to almost double to Rs. 2 lakh Cr. by CY2025 from Rs. 1.1 Lakh Cr. in CY2020. Moreover the Indian fashion market is estimated to grow 2.2x from Rs. 3.8 lakh Cr. in CY2020 to Rs. 8.7 lakh Cr by CY2025. 

At the upper end of the price band, the Nykaa is valued at 21.8x its FY21 revenues While valuations may appear to be expensive Naykaa is one of the very few profitable Unicorns in India and we believe that the company is well positioned to benefit from the exponential growth in the online beauty and fashion retailing business over the next decade.hence we believe that that the valuations are justified and hence we recommend to SUBSCRIBE to the issue.

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