FSN E-commerce Ventures (Nykaa) IPO : Subscribe or NOT?

The data has been compiled from various sources and might have small difference but overall theme is to subscribe or not — we will focus on that

FSN E-commerce Ventures (Nykaa) IPO –Incorporated in 2012, FSN E-commerce Ventures, the parent company of Nykaa, is a native consumer-technology company involved in selling beauty, wellness, personal-care and fashion products

Business — FSNEV has a diverse portfolio of beauty, personal care and fashion products, including owned brand products manufactured by it. As a result, the company has been established not only as a lifestyle retail platform but also as a consumer brand. It offers consumers an Omnichannel experience with an endeavour to cater to the consumers’ preferences and convenience.

Offer purpose —

Fresh equity issue worth Rs. 630.00 cr. and an offer for sale of Rs. 5351.92 cr,To meet its requirements of funds for investment in subsidiaries (Rs. 42.00 cr.), capital expenditure (Rs. 42.00 cr.), repayment/prepayment of certain borrowings (Rs. 156.00 cr.), brand visibility and awareness (Rs. 234.00 cr.) and general corporate purpose

Risks —

High competitive landscape and on top of that unorganised market also poses a challenge

Maximum revenue coming from few client posing concentration risk

Any negative publicity in today digital marketing can have significant impact on company revenues

Also READ : Fino Payment Bank IPO : SUBSCRIBE OR NOT

Strength

Association with National and international brands
Omnichannel presence
India’s leading beauty and personal-care companies in the organised space and enjoys strong brand awareness
Strong supply-chain capabilities with around 20 warehouses throughout the country
Stringly technological driven business

Future

The company has a relatively asset-light business. With significant spending on marketing to attract new consumers and subsidiaries to open new retail stores, it will be able to scale up its business.

Valuations

Valuations are really astronomical and looks like promoters encashing the bull market leaving little on table

Should we apply?

One can avoid and wait for significant dip to enter. Long term story remains intact

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