How to become a Rs 1 trillion company by market cap through IPO? Ask Nykaa!

How to become a Rs 1 trillion company by market cap through IPO? Ask Nykaa!

by 5paisa Research Team Last Updated: Dec 13, 2022 - 04:13 pm 46.2k Views
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Investors are embracing P/E levels of 1,710 for this beauty and fashion company.

Nykaa has been a hot topic on Dalal Street since it had a massive debut on the exchanges. Sky has not been the limit for the optimism that investors have shown for this huge IPO listing when it gained about 78% premium over the higher end of the issue price. This has been undoubtedly one of the biggest IPO debuts which has created a lot of buzz, especially among retail investors.

Post-pandemic markets are witnessing a bull rally like never before. The markets have rebounded strongly over last year. As a result, IPOs have come in hoards to reap the benefits of pumped optimism of the investors. One such trending IPO was FSN E-Commerce Ventures Ltd (Nykaa) which received an overwhelming response from investors. The IPO was subscribed 82 times. As a result, the stock had a stellar debut and opened on 10 November at Rs 2,001 on the BSE and Rs 2,018 on the NSE making it a trending company in the markets. The company’s founder and CEO, Falguni Nayar, became the richest self-made female billionaire in India with a net worth of about USD 6.5 billion.

The company announced quarterly results that ended September on 14 November, a few days after its debut. The profitability dipped by 65% on a sequential basis and by nearly 96% when compared to the same quarter last year. Increased marketing costs along with IPO costs had led to poor profits in the quarter.

The price-to-earnings multiple of the company has soared to insane levels of 1710. It would take 1710 years for investors to get back their invested money assuming the current level of earnings. Only the shareholders of the company know how this gap is going to fill with ever-optimistic growth. The stock had a high of Rs 2,409.95 and a low of Rs 1,994.10 in its so far journey.

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