Nykaa IPO fully covered on Day 1; GIC, Tiger Global, ADIA make anchor bets

 Nykaa IPO fully covered on Day 1; GIC, Tiger Global, ADIA make anchor bets

The initial public offering of Indian cosmetics startup Nykaa was fully covered on the first day of the issue, thanks to high demand for its shares from both retail and institutional investors.

The IPO was subscribed 1.55 times on Thursday as the offering of 26.48 million shares, excluding anchor allotment, received bids for 40.9 million shares.

The quota reserved for retail investors was covered 3.5 times while the portion set aside for institutional investors was subscribed 1.4 times. Non-institutional investors, which include corporate houses and high-net-worth individuals, had bid for roughly 60% f the number of shares reserved for them.

Ahead of the IPO, Nykaa raised almost Rs 2,396 crore ($320 million) from a large number of anchor investors. Nykaa, operated by FSN E-Commerce Ventures Ltd, allotted 21.29 million shares at the upper end of its IPO price band of Rs 1,085-1,125 apiece. A third of the amount came from 21 Indian mutual funds.

Singapore sovereign wealth fund GIC Pte Ltd bought shares worth around Rs 75 crore while Abu Dhabi Investment Authority, the Gulf emirate’s wealth fund, put in Rs 45 crore, a stock-exchange filing shows.

Tiger Global and Canada Pension Plan Investment Board invested Rs 56.2 crore each. Two other Canadian pension funds, CDPQ and Ontario Teachers’ Pension Plan, also came in as anchor investors with cheques of Rs 15 crore and Rs 33.7 crore, respectively.

Dutch pension fund APG and Norway’s Government Pension Fund Global chipped in with Rs 44.1 crore and Rs 33.7 crore, respectively. Existing venture capital investor Steadview Capital invested Rs 33.7 crore.

Funds managed by BlackRock, the world’s biggest asset manager, purchased shares for Rs 62 crore. Funds managed by Capital Group, Fidelity, T Rowe Price, JP Morgan, Invesco, Morgan Stanley, Goldman Sachs, Nomura and BNP Paribas were among the other offshore investors.

The beauty products e-tailer, founded by former investment banker Falguni Nayar, intends to raise as much as Rs 630 crore through a fresh issue of shares.

The IPO also includes an offer for sale of 41.9 million shares by the Sanjay Nayar Family Trust, venture capital and private equity backers, and some high-net-worth individuals.

Sanjay Nayar is the husband of Falguni Nayar and former India chief of global private equity giant KKR & Co, Inc. The selling investors including TPG Growth and Lighthouse Funds.

The total IPO size is estimated to be Rs 5,350 crore ($710 million). It will value the company at Rs 53,201 crore ($7.1 billion). The IPO closes on November 1.

The Nayar family will continue to own a stake of about 52-52.5% in the company after the IPO. At present, it owns a 54.25% stake.

Also read: How much money will PE firms rack up as Nykaa eyes $7.1 bn IPO valuation?

Sumit Upadhyaya

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