Retail investors, QIBs push Nykaa IPO across the finish line on first day

Online-to-offline beauty products company Nykaa’s initial public offering made a flying start on Thursday with the share sale getting fully covered on the first day itself despite a big drop in secondary markets.

Nykaa’s IPO of 2.648 crore shares, excluding the anchor allotment, had received bids for 4.09 crore shares by 4:30 PM. This means the issue was subscribed 1.55 times.

Subscription was led by both retail investors and qualified institutional buyers (QIBs). Retail investors bid for 1.66 crore shares, or 3.5 times the 47.5 lakh shares reserved for them, by late afternoon. QIBs bid for almost 1.99 crore shares, or 1.4 times their quota of 1.4 crore shares.

Non-institutional investors such as corporate houses and high-net-worth individuals placed bids for about 60% of the 71.29 lakh shares reserved for them.

Meanwhile, secondary markets posted a sharp drop on Thursday. The BSE's 30-stock Sensex fell 1,158 points, or 1.9%, to end at 59,984.70.

Nykaa anchor allotment

Investors’ interest in the Nykaa IPO was evident also from the high demand for its shares in the anchor book. The company mopped up around Rs 2,396 crore from more than 90 anchor investors by selling 2.129 crore shares at the upper end of its IPO price band of Rs 1,085-1,125 apiece.

As many as 21 mutual funds applied for Nykaa shares in the anchor book, accounting for one-third of the total amount.

Several local insurance companies and a wide range of overseas institutions also came in as anchor investors. These include sovereign wealth funds GIC and Abu Dhabi Investment Authority; Canadian pension funds CPPIB, CDPQ and Ontario Teachers’ Pension Plan; and New York-based Tiger Global.

Other foreign institutions that made anchor investors include BlackRock, Fidelity, JP Morgan, Invesco, Morgan Stanley, Goldman Sachs, Nomura and BNP Paribas.

Nykaa intends to raise as much as Rs 630 crore through a fresh issue of shares. The IPO also includes an offer for sale of 4.19 crore shares by a promoter group entity and some of the company’s existing investors.

The overall IPO size is about Rs 5,350 crore. The IPO closes on November 1.