Shares of cosmetics-to-fashion platform Nykaa made a blockbuster opening on Wednesday, valuing the Indian company at near $13 billion, in the latest start-up listing after food delivery firm Zomato’s stellar debut in July.

Shares of FSN E-Commerce Ventures, the profit-making company that owns the Nykaabrand, soared 89.2 percent to 2,129 rupees ($28) after opening at 2,018 rupees ($27) in pre-open trade.

The debut price was at a 79.4 percent premium to the initial public offering (IPO) price of 1,125 rupees ($15), giving the company a valuation of 954.37 billion rupees ($12.86 billion).

The company’s offering last week drew bids worth $32.55 billion as it was oversubscribed by nearly 82 times, signalling strong investor demand for a start-up that, unlike many others, has already achieved profitability.

“Nykaa has a seen a strong listing due to positive market sentiment... since it is the only profit-making company in the digital space, it is receiving higher investor traction,” said Ajit Mishra, vice president, research, Religare Broking. However, the start-up’s valuations look expensive at these (levels) despite factoring in strong long-term growth prospects, Mishra added.

Several high-profile Indian start-ups have already filed or are planning to file for IPOs, including Ant Group-backed fintech firm Paytm, SoftBank-backed companies hotel aggregator Oyo, ride-hailing firm Ola and logistics provider Delhivery.

The listing comes at a time when companies are seeking to capitalise on an Indian market that has scaled record highs on the back of a decline in Covid-19 cases, a reopening of the economy and ample liquidity.

Nykaa, which functions in two broad segments, namely beauty and personal care and apparel & accessories, was incorporated in 2012 and swiftly became a popular name among Indian consumers.

The start-up, whose investors include private-equity firm TPG, Fidelity and Indian celebrities Alia Bhatt and Katrina Kaif, runs its online operations through mobile applications and websites along with 80 brick-and-mortar stores across the country, as of Aug. 31.

By Anuron Kumar Mitra and Shivani Singh; Editor: Sherry Jacob-Phillips

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