Nykaa IPO: Should you invest in Nykaa

by mr_samarth
September 4, 2021
No Comments

A step toward the win-win strategy….

When a company needs more money for expenses, debt, expansion, or any other reason, it goes public and raises funds from the general public by going public on the stock exchange. Going public necessitates the launch of an initial public offering (Nykaa IPO). An initial public offering (IPO) is a method of selling new stock to the general public by a private corporation.

A company can raise capital from the general public through an initial public offering (IPO). Because the transition from a private to a public company is usually accompanied by a share premium for current private investors, it can be a critical time for private investors to fully realize gains from their investment.

In the meantime, public investors may be able to participate in the offering. An initial public offering (IPO) is not a novel concept. I hope this much rewriting was enough to explain what an IPO is. So, if you’re reading this for the first time, let me give you some background on IPOs. A corporation considered private prior to an IPO.

In the meantime, public investors may be able to participate in the offering.

An initial public offering (IPO) is not a novel concept. I hope this much rewriting was enough to explain what an IPO is. So, if you’re reading this for the first time, let me give you some background on IPOs. A corporation considered private prior to an IPO.

The company grew with a small number of investors as a pre-IPO privately held company, including early adopters such as the founding members, relatives, and peers, as well as wealthy traders. A company’s initial public offering (IPO) is a significant step because it allows it to raise a large sum of money. This improves the company’s ability to expand and grow. The steadily increasing accountability and share listing validity may also help in obtaining favorable deals when borrowing money.

Nykaa, which was founded in 2012, is one of the leading online and in-store retail chains of beauty and health and wellbeing products.

The company also sells a wide variety of clothing and accessories. On a monthly basis, its digital platform serves the needs of over 5 million active users. It offers goods from over 2,000 brands in a variety of categories. These include beauty products, vitamin supplements, make-up, and other cosmetics. As of 2021, Nykaa had more than 12 storage facilities devoted entirely to its fashion and beauty product lines across India.

Objectives of Nykaa are to consider before making a plant to invest in.

General corporate purposes fulfillment –
To meet its capital expenditure requirements
Extending its operations in a market where investors are showing unprecedented interest.

Understanding the Nykaa IPO.

According to reports, Nykaa’s initial public offering will aim to raise between $500 million and $750 million. The Mumbai-based firm is seeking a valuation of around $3.5 billion. Its upcoming IPO will include both a new issue and an offer for sale. The fact is well known that Nykaa is going public this year, but the important dates such as are not mentioned anywhere. A date such as the following would be announced soon.

IPO Open Date

Yet To Be Announced

IPO Close Date

Yet To Be Announced

Basis Of Allotment Date

Yet To Announced

Initiation Of Refunds

Yet To Be Announced

Credit Of Shares To

Demat ACcount

Yet To Be Announced

IPO Listing Date

Yet To Be Announced

UPI Mandate Expiry Date

Yet To Announced

The reason that says to invest in Nykaa IPO.

Omnichannel platforms dedicated to beauty and wellness products, such as Nykaa, have plenty of room to expand their operations in the personal care space. This is primarily due to a mismatch between latent demand and supply in the premium and mass markets.

The company has already reduced the supply gap by developing a diverse portfolio of high-availability products. Its multi-channel sales strategy has been critical in this regard. Furthermore, the pandemic has had a positive impact on Nykaa’s customer adoption.

Overall, the outlook for Nykaa appears to be positive, with the growing popularity of digital platforms and the expansion of India’s beauty industry. As a result, investors may want to consider booking shares of this company’s upcoming initial public offering once it becomes available for subscription.

Aside from revenue, investors should be aware of the following key figures:

In FY2019, Nykaa IPO reported a net profit of Rs. 2.31 crores and revenue from operations of Rs. One thousand one hundred fifty-nine crores, compared to Rs. 555.10 crores in the previous fiscal year. Furthermore, this company was valued at $743 million in FY2019.

In FY2020, the company’s EBITDA (earnings before interest, tax, depreciation, and amortization) was Rs. 94 crores.

Important highlights about Nykaa.

This Mumbai-based company operates over 75 offline stores throughout India.

In 2020, Nykaa became a unicorn after raising approximately Rs.166.6 crore in Series E3 funding led by Steadview Capital.

Nykaa processes 1.5 million orders per month and has approximately 15 million registered users.

Nykaa completed the acquisition of an online jewelry company, Pipa Bella, in April 2021 before announcing its intention to go public.

There are considerable things about this company, such as strengths and weaknesses. What are the competitor are doing? This is also a considerable point to ponder upon. Let us know more about it.

Strength

Nykaa’s product portfolio constantly being updated, resulting in a more diverse portfolio. This has helped the company’s customer base grow. Furthermore, by constantly updating its offerings, this company has placed itself in a favorable position to address the challenges posed by the dynamic business environment.
Impressive balance sheet: Nykaa’s strong balance sheet gives it room to grow. It can use funds to fund new projects, diversifying its revenue stream. This will improve its key financial metrics such as Return on Equity (ROE), Return on Sales (ROS), and others.
Effective stock management: This company uses an inventory model to ensure that it has enough stock to meet demand.
Powerful social media presence: Nykaa regularly runs social media marketing campaigns. This has been extremely beneficial in terms of increasing sales and acquiring new customers.

Weakness

Technology implementation: Nykaa has integrated technology into its backend processes. However, it has been unable to capitalize on technological advantages in front-end processes.
Low investment in research and development: Nykaa does not invest enough money in improving its research and development infrastructure. This has the potential to have a direct impact on the performance of this company.
Handling customer complaints: Nykaa continues to struggle with efficiently addressing customer complaints. This may have an impact on the company’s growth.
Delivery fees: Nykaa charges delivery fees if the order value is less than a certain amount, which disqualifies potential buyers.

Opportunities

Growth Prospect: As people’s standard of living improves, more people are turning to e-commerce, which presents an excellent opportunity for Nykaa IPO.
AI advancements: The company can take advantage of AI advancements to estimate consumer demand and meet the needs of niche segments.
E-commerce business model: Nykaa’s e-commerce business model can help this company collaborate with local suppliers and logistics companies that are part of international markets. Furthermore, the company’s social media growth may enable it to gain access to a large number of potential customers while maintaining a low marketing budget.

Threats

Domestic rule changes: As time goes on, any changes in domestic laws and tax liability may have an impact on Nykaa’s plans.
Increasing competition: The number of competitors, both online and offline, is growing. As a result, there is always the possibility of losing customers.
Drop-in consumer spending: A drop in consumer spending can have an impact on this company’s profitability.

This is a very compressive study and free from any type of prejudice.

One should not forget that those investments are subject to markets risks. You need to be proactive and very conscious about the shares of all investment-related things. Our work is to show you the mirror with utmost reality. The final decision lies in your hand. The company has good competitors too. Such as Myntra and Purple, and their revenue is almost the same and is very customer-friendly brands. All the above-written material is to be considered many times, and before making any decision, you need to take into consideration the phenomenon described and mention here. Nykaa IPO is undoubtedly a good brand, and your decision to invest in it may be one of the very fruitful and good for your future.