Veteran investment banker-turned-entrepreneur Falguni Nayar, who has led scores of Indian companies to public listings as a banker, is now pursuing an IPO of her own as at a valuation of $7 billion to $7.2 billion for the beauty and fashion retailer Nykaa which she founded in 2012.
The Mumbai-based multi-brand retailer of cosmetics and apparel plans a fresh issue for 6.3 billion rupees ($86 million) and the sale of existing shares of almost 42 million shares in the price band of 1,085 to 1,125 rupees.
The IPO will launch on October 28 and the issue closes on November 1. Nykaa is looking to list on the Indian bourses on November 11, a few days after the Hindu festival of Diwali.
Nayar, 58, the founder, managing director and CEO of Nykaa, owns 54% of the company, along with her husband Sanjay Nayar, India CEO of U.S. private equity giant KKR, and their two children. She is looking to sell up to 4.8 million shares through the Sanjay Nayar Family Trust. Existing investors like Hong Kong commodities billionaire Harry Banga, Indian consumer goods billionaire Harsh Mariwala, and auto billionaire Sunil Kant Munjal will also be selling shares during the IPO.
Nayar–who is the second self-made woman billionaire from India after biotech entrepreneur Kiran Mazumdar Shaw–will see her net worth rise to nearly $3.8 billion post-IPO. She became a billionaire in a pre-IPO private placement in June.
Nykaa, which offers more than 4,000 brands across the beauty, personal care and fashion platforms, is looking to deepen its presence in the Indian beauty and fashion market which is expected to more than double to $152 billion in 2025 from $70 billion in 2020, according to Bangalore-based RedSeer Management Consulting.
Nykaa now has 80 stores across 40 cities, but still derives 97% of its gross merchandise value from online sales with a 63% contribution from tier 2 and tier 3 cities.
Despite the pandemic, Nykaa has seen a huge surge in sales as vaccinations increase. India crossed the historic “one billion vaccine doses” mark this week. For the three months ended June 30, 2021, Nykaa’s gross merchandise value was 14.7 billion rupees ($198 million) and revenue was 8.2 billion rupees ($110 million) with profits of 35.2 million rupees ($474,000). Nykaa’s revenue rose to $334 million for the fiscal year ended March 2021 from $236 million in the previous period. The company reported a net profit of $8 million in that same period versus a net loss of $2 million in fiscal 2020.
Among the flurry of proposed and completed IPOs this year, Nykaa is a rare example of a startup that turned profitable before it went for an IPO.
Nykaa will be deploying the IPO proceeds towards new stores, new warehouses and for enhancing brand visibility. It already works with more than 3,000 influencers – including Gen Z trend setters, lifestyle bloggers and celebrities.
Nayar founded “Nykaa,” which is derived from the Sanskrit word “Nayaka” meaning one who’s in the spotlight, with an investment of $2 million and with the view to bringing quality cosmetics including international beauty brands like Clinique and Bobbi Brown to Indian consumers.
She quit her job as an investment banker–after 20 years in the business–and plunged into the world of beauty and online retailing. She soon expanded to brick and mortar stores and rolled out new product categories like Nykaa Man and Nykaa Fashions.
“I wanted to experience the journey of creating something from scratch,” said Nayar said in an interview to Forbes Asia in 2019.
That dream has come to fruition.