Nykaa's initial public offering (IPO) values the company at nearly $13 billion.

After opening at Rs 2,018 in pre-open trade, shares of FSN E-Commerce Ventures, the profit-making company that owns the Nykaa brand, soared 89.2 percent to Rs 2,129.

On Wednesday, Nykaa's stock made a strong market debut on Indian stock exchanges. On the NSE, the stock began trading at a premium of more than 82 percent to its IPO issue price of 1,125 per share, at a price of 2,054 per share. Meanwhile, Nykaa shares debuted on the BSE at $2.063, with a market capitalization of over Rs. 1 lakh crore.

The company's initial public offering last week was nearly 82 times oversubscribed, indicating strong investor demand for a startup that, unlike many others, has already achieved profitability.

Nykaa has seen a large and powerful listing leading to strong market sentiment... as it is the only profitable company in the digital space, it is receiving more investor traction," said Ajit Mishra, vice-president, research, Religare Broking.

Ant Group-backed fintech firm Paytm, SoftBank-backed hotel aggregator Oyo, ride-hailing firm Ola, and logistics provider Delhivery are among the high-profile Indian startups that have filed or are planning to file for IPOs.

The IPO comes at a time when companies are looking to profit from an Indian market that has reached new highs as a result of a drop in Covid-19 cases, the rebuilding of the economy, and plenty of liquid assets.

Nykaa, founded in 2012 by former investment banker Falguni Nayar, had a total of 55.8 million downloads across all of their mobile applications as of August 31, 2021. Nykaa, unlike most startups, has turned a profit, with a consolidated net profit of 61 crore for the fiscal year ended March 31, 2021 (FY21), compared to a loss of 16.3 crore in FY20.

Nykaa stated that the proceeds from the IPO will be used to expand the company by opening new retail stores and warehouses. The e-commerce beauty behemoth also intends to pay off some of its debt, lowering interest costs and improving profitability.

Nykaa has a market share of more than 18.5 percent in the online beauty and personal care space (calculated as revenue of FY20/TAM). By 2025, the online beauty and personal care market in India is expected to reach $5.4 billion. Other companies in this market include Purplle, SUGAR Cosmetics, Pureplay, Mamaearth, and MyGlamm. MyGlamm joined the unicorn club a few days ago.