Nykaa, one of the most popular online marketplaces for beauty and wellness products in India is all set to launch its initial public offering on October 28, according to sources. The retailer plans to raise up to Rs 5,200 crore through IPO coming next week. Nykaa IPO will be open for subscription from October 28 to November 1, according to Economic Times. The anchor issue to raise up to Rs 2,340 crore will open on October 27, one day prior to Nykaa IPO.
The Rs 5,200-crore Nykaa IPO will include a primary issue of stocks worth Rs 630 crore and an offer for sale for 43.11 million shares, according to the company’s draft red herring prospectus (DRHP) approved by the Securities and Exchange Board of India (SEBI). Investors will likely to dilute their stakes include TPG, Light House India Fund, JM Financials, Yogesh Agencies, Sunil Kant Munjal, Harindarpal Singh Banga, Narotam Sekhsaria, Narotam Sekhsaria and Mala Gaonkar, according to the company’s draft IPO prospectus.
The Mumbai-based company has appointed Kotak Mahindra Capital, BofA Securities, ICICI Securities, Citibank, Morgan Stanley and JM Financial to manage its public issue.
Started in 2012 by by former investment banker Falguni Nayar, Nykaa is one of the most unique startups in India. It is also among the very few online retailers in India. The promoter group, Nayar, with her husband Sanjay Nayar and two children, hold more than 53 per cent in the parent firm of Nykaa. Even after the IPO, Falguni Nayar and family will continue to own the majority stake in the company.
The proceeds from IPO will go towards — a) Investment in certain of its Subsidiaries, namely, FSN Brands and / or Nykaa Fashion for funding the set-up of new retail stores, b) Capital expenditure to be incurred by the Company and investment in certain of its Subsidiaries, namely, Nykaa E-Retail, FSN Brands and Nykaa Fashion for funding the set-up of new warehouses, c) Repayment or prepayment of outstanding borrowings availed by the Company and one of its subsidiaries, namely, Nykaa E-Retail, d) Expenditure to enhance the visibility and awareness of its brands, e) General corporate purposes.
The omni-channel beauty and consumer-care products retailer posted a net profit of Rs 61.96 crore in FY21 against a net loss of Rs 16.34 crore in FY20. The revenue from operations was Rs 2,440.89 crore in financial year 2020 which grew 38.10 per cent from the financial year 2020. The firm’s total GMV was Rs 4,045.98 crore, which rose 50.7 per cent over the financial year 2020. The EBITDA margin was recorded at 6.61 per cent in the financial year 2021.
From mobile applications to physical stores in major cities, the omni-channel approach of Nykaa has helped it to emerge as the most pronminent names in India. As of March 31, 2021, it had cumulative downloads of 43.7 million across all its mobile applications. During the financial year 2021, 86.7 per cent of its online gross merchandise value (GMV) came through its mobile applications. Nykaa operated 73 physical stores comprising 72 stores for beauty and personal care products and one store for fashion products, in 38 cities of India.
Nykaa has a large market opportunity aggregating $152 billion in the growing beauty, personal care and fashion industry by 2025 in India, the company believed. The Indian beauty and personal care market is estimated to grow to approximately $28 billion by the calendar year 2025 from $16 billion in the calendar year 2020, according to RedSeer Report.
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