IPO Corner: Nykaa and Nykaa Fashion & Fino Payments Bank

IPO: Look Before You Apply
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Nykaa and Nykaa Fashion

  • Offer Opens: Thursday, October 28, 2021
  • Offer Closes: Monday, November 1, 2021
  • Price Band: Rs 1085–1125 per equity share
  • Minimum Bid Lot: 12 Equity Shares and in multiples
  • Share allotment:  To be finalised on November 8
  • Refunds: To be given on November 9
  • Trading: It will commence from November 11

VERDICT: Neutral 

FSN E-Commerce Ventures, the digital consumer technology platform that runs Nykaa and Nykaa Fashion will launch its initial public offering on October 28. The offer will close on November 1. The IPO comprises a fresh issue of Rs 630 crore and an offer for sale of 4.197 crore equity shares by the promoters and investors. The company plans to raise Rs 5,351.92 crore through its public issue at the upper price band. The price band has been fixed at Rs 1,085-1,125 a share. FSN E-Commerce Ventures is promoted by Falguni Nayar and backed by private equity firm TPG.

Bids can be made for a minimum of 12 shares and in multiples of 12 shares thereafter. Retail investors can invest a minimum of Rs 13,500 for one lot and a maximum of Rs 1,89,000 for 14 lots. Up to 2.5 lakh equity shares are set aside for employees. The share allotment will be finalised on November 8. Refunds will be given on November 9 investors will get shares in their demat accounts on November 10. Trading will commence from November 11. Nykaa will utilise the net proceeds for opening retail stores, for capital expenditure and investment in subsidiaries. The proceeds will also be utilised to enhance brand visibility and awareness, besides general corporate purposes.

FSN E-Commerce Ventures has a diverse portfolio of beauty, personal care and fashion products, including own products. The company operates its beauty and personal care through the Nykaa vertical, and apparel and accessories via the Nykaa Fashion channel. It also runs offline channels, comprising 80 stores across 40 cities in India over three different formats, as of August 2021.

The main promoters Falguni Nayar Family Trust and Sanjay Nayar Family Trust currently hold 45.99 percent equity stake in the company. Public shareholders including Steadview Capital Mauritius, TPG Growth IV SF, Lighthouse India Fund III, Fidelity Securities Fund, and Kravis Investment Partners LLC have 45.78 percent shareholding. While the Sanjay Nayar Family Trust will sell up to 48 lakh equity shares, investors TPG Growth IV SF Pte Ltd will offload over 54.21 lakh shares and Lighthouse India Fund III will sell 48.44 lakh shares through the OFS. Yogesh Agencies & Investments Private Ltd will offload over 25.38 lakh shares, and JM Financial and Investment Consultancy Services 9.14 lakh shares. There are 16 shareholders who are sellers. Lighthouse India III Employee Trust, Sunil Kant Munjal, Harindarpal Singh Banga, along with Indra Banga, Narotam Sekhsaria, Rishabh Mariwala, Jeenoo Khakhar, along with Kanika Khakhar and Isha Khakhar, Michael Carlos, Samina Hamied, Sanjay Maliah, Vikram Sud, and Karan Swani are among the sellers.

Fino Payments Bank 

  • Offer Opens: Friday, October 29, 2021
  • Offer Closes: Tuesday, November 2, 2021
  • Price Band: Rs 560-577 per equity share
  • Minimum Bid Lot: 25 Equity Shares and in multiples
  • Share allotment: November 9, 2021
  • Refunds: November 10, 2021
  • Trading: November 12, 2021

Verdict – Apply

Fintech company Fino Payments Bank’s offer opened for subscription on October 29 and will close on November 2. The offer comprises a fresh issue of Rs 300 crore by the company and an offer for sale of 1.56 crore equity shares by sole promoter Fino PayTech. The price band for the offer has been fixed at Rs 560-577 per equity share. The total fundraising through the IPO would be Rs 1,200.29 crore at the upper end of the price band. Investors can bid for a minimum of 25 equity shares and in multiples of 25 equity shares thereafter. The minimum investment to be made by retail investors is Rs 14,425 for a single lot and the maximum investment would be Rs 1,87,525 for 13 lots. The company will utilise net proceeds to augment the bank’s tier-1 capital base to meet its future capital requirements.

Of the total offer size, 75 percent is reserved for qualified institutional buyers, 15 percent for allocation to non-institutional bidders and the remaining 10 percent for retail investors. The share allotment will be done on November 9 and refund to unsuccessful investors will be initiated on November 10. Equity shares will get credited to demat accounts of eligible investors on November 11. Trading in the bank’s equity shares will commence on November 12.

Fino Payments Bank offers a diverse range of financial products and services that are primarily digital and have a payments focus. Since 2017, the company has grown its operational presence to cover over 90 percent of districts as of September 2021. It operates on an asset-light business model and commission-based income generated from its merchant network.

Fino Payments Bank is a wholly-owned subsidiary of Fino PayTech which is engaged in providing technology-based solutions and services related to financial inclusion. Fino PayTech is backed by Blackstone, ICICI Bank, Intel Capital Corporation, Bharat Petroleum Corporation, HAV3 Holdings (Mauritius), and World Bank subsidiary International Finance Corporation. In September 2015, Fino PayTech received in-principle approval from the RBI to set up a payments bank that commenced operations in June 2017.

About the author: IE&M Team
IE&M Team
Indian Economy & Market is an Indian media and information platform producing data-backed news and analysis on all the vital elements at the intersection of the economy, stock markets, mutual fund, insurance, commodities, currency, technology, startups and business.

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