Nykaa files DRHP with Sebi, to raise Rs 525 crore via fresh equity

Topics Nykaa | Nykaa Start-up

Falguni Nayar, founder and chief executive officer of Nykaa
Beauty aggregator platform Nykaa filed its draft red herring prospectus (DRHP) with market regulator Sebi. According to the DRHP, the company is raising Rs 525 crore via fresh equity. Promoters and investors will be selling upto 43.1 million equity via offer for sale.

The DRHP did not mention the total size of the IPO. According to media reports the company is planning to raise Rs 4,000 crore in the IPO and sources said the company is seeking a valuation between Rs 35,000 crore to Rs 40,000 crore.

Those opting to sell via OFS include promoters Sanjay Nayar Family Trust, and investors such as TPG Growth IV, Lighthouse India Fund III, Lighthouse India III Employee Trust, JM Financial and Investment Consultancy, Sunil Kant Munjal and others.

The company stated that it intends to use the funds raised via fresh equity sale to make investments its subsidiaries, namely, FSN Brands and / or Nykaa Fashion for funding the set-up of new retail stores; for capital expenditure of Nykaa E-Retail, Nykaa Fashion and FSN Brands for funding the set-up of new warehouses; repayment or prepayment, in full or in part, of certain borrowings availed by the company; for expenditure to enhance the visibility and awareness of our brands; and general corporate purposes.

Nykaa had raised Rs 100 crore in 2020 from existing investors Steadview Capital and its valuation was then pegged at $1.2 billion.

According to the DRHP, Nykaa’s revenue from operations in the Financial Year 2021 was Rs 24,40.89 crore, which grew 38.10% from the Financial Year 2020. Its restated profit for the year in the Financial Year 2021 was Rs 61.94 crore, as compared to a restated loss of Rs 16.34 crore for the Financial Year 2020. It reported EBITDA of Rs 1,614.26 million and an EBITDA margin of 6.61% in the Financial Year 2021.

Nykaa was founded in 2012 by investment banker Falguni Nayar and today is a leading player in the online beauty aggregator segment.

As of March 31, 2021, Nykaa had a cumulative downloads of 43.7 million across all its mobile applications, said the DRHP and during the Financial Year 2021, 86.7% of its online GMV came through mobile applications.

Nykaa’s offline channel comprises 73 physical stores across 38 cities in India over three different store formats as of March 31, 2021. The company’s physical stores offer a select offering of products as well as a seamless experience across the physical and digital worlds, said the company in its DRHP.

As of March 31, 2021, Ntkaa offered approximately 2 million SKUs from 3,826 national and international brands consumers across business verticals. In the Financial Year 2021, its total GMV was Rs 40,459.8 million, which grew by 50.7% over the Financial Year 2020.

India is projected to become a Rs 1,981 billion beauty and personal care opportunity by 2025. The beauty and personal care market in India was sized at Rs 1,267 billion in 2019, growing at a CAGR of 13% in the last 3 years. Though the market fell down to Rs 1,120 billion in 2020 as a result of reduced spending during the first Covid-19 wave, it is projected to grow at a CAGR of 12% to reach Rs 1,981 billion in 2025 implying a CAGR of 7.7% from the pre-Covid-19 market in 2019.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel