Nykaa IPO: Will It Translate the Beauty and Personal Care Market Opportunity into Big Profits?

Nykaa IPO: Will It Translate the Beauty and Personal Care Market Opportunity into Big Profits?
Case Code: FINC200
Case Length: 11 Pages
Period: 2019-21
Pub Date: 2023
Teaching Note: Available
Price: Rs.300
Organization: Nykaa E-Retail Private Limited
Industry: Cosmetics & Toiletries
Countries: India
Themes: Corporate Finance, E-commerce
Nykaa IPO: Will It Translate the Beauty and Personal Care Market Opportunity into Big Profits?
Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

The case is about the IPO of Indian cosmetic e-retailer Nykaa E-Retail Private Limited (Nykaa). Nykaa is a leading specialty beauty and personal care (BPC) retailer that offers a wide range of beauty, fashion, and other luxury products across its website, mobile apps, and offline stores in the country. With the growth of the BPC industry in the country, Nykaa has become one of the fastest growing brands and a preferred destination for consumers to shop for luxury products through the digital platform.

After establishing a strong footprint in the makeup and skincare online delivery, Nykaa decided to go public to build itself into a more sustainable organization. On October 28, 2021, it opened its public issue to raise more than Rs.53,520 million. The price band for the offer was fixed at Rs.1,085-1,125 per equity share. The IPO comprised the fresh issue and the offer for sale shares. The company planned to use the proceeds of the IPO to meet debt obligations and capital expenditure requirements, expand operations in growing markets, and for general corporate purposes. On the last day of the issue – November 01, 2021 – the IPO was subscribed 81.78 times as the offer received bids for 2165.9 million equity shares as against the IPO size of 26.4 million equity shares. Considering the potential growth of BPC market in the country, Nykaa has good future prospects and its IPO looks pretty attractive.

Issues

The case is structured to achieve the following teaching objectives:

  • Understand the importance of public issues in the beauty and personal care sector.
  • Analyze the features of the Nykaa IPO
  • Assess the key strengths and risks of Nykaa
  • Discuss how can Nykaa IPO boost business growth for the company

Contents

Keywords

Beauty and personal care; Initial Public Offer; Shareholders; Cosmetic e-retailer; Omnichannel business; Digital platforms; Offer for sale; Fesh issue; Anchor book; Anchor investors; Market value; Book running lead managers; Qualified Institutional Buyers (QIB); Non Institutional Investors (NII); Retail Individual Investors (RII); Gross merchandise value

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