Veteran financial commitment banker-turned-entrepreneur Falguni Nayar, whose elegance retailer Nykaa is poised to start its IPO, has turn into India’s latest billionaire. A pre-IPO non-public placement in June valued Nykaa at $2.3 billion, putting Nayar in the a few comma club with an estimated internet value of $1.1 billion.
The listing, which could worth the nine-calendar year-outdated corporation at an estimated $4.5 billion or much more, would be a massive windfall for Nayar, propelling the well worth of her original $2 million investment even more.
As per the draft purple herring prospectus, which was submitted with the stock sector regulator this 7 days, the organization is searching for to elevate $71 million by way of a fresh new challenge of shares and is also proposing to promote 43.11 million shares by current shareholders (which include Nayar). The IPO will consequence in a huge payoff for Nykaa’s early buyers, these kinds of as buyer items billionaire Harsh Mariwala and Hong Kong-centered commodities billionaire Harindarpal Singh Banga.
Nayar, 58, the founder, running director and CEO of the Mumbai-centered on the internet seller of cosmetics and attire, owns 54% of the company, along with her partner Sanjay Nayar, India CEO of U.S. private fairness giant KKR, and their two children. The IPO is well-timed as Nykaa has not long ago turned financially rewarding, creating it an attractive proposition for investors.
Amid pandemic-induced lockdowns, customers stuck at residence went on an online browsing binge, ordering every thing from lipsticks and mascaras to pores and skin care creams. That searching surge boosted Nykaa’s annual profits to $334 million for the fiscal 12 months finished March 2021, up from $236 million in the prior fiscal 12 months. The corporation claimed internet earnings of $8 million in that identical interval vs . a internet reduction of $2 million in fiscal 2020.
Nayar is on the lookout to deploy the IPO proceeds into brick and mortar—new warehouses and stores—as well as for boosting Nykaa’s brand name visibility. Nykaa, derived from the Sanskrit term “Nayaka” indicating somebody in the spotlight, produced a niche for itself by advertising luxury splendor makes like Estee Lauder, Clinique and Bobbi Brown by way of its endless on line aisles.
Nayar is now wanting to deepen Nykaa’s existence on the ground as a lot more aspiring Indians latch on to splendor products. In accordance to estimates by Bangalore-dependent RedSeer Administration Consulting, the Indian splendor and particular care market place is predicted to hit $28 billion in 2025, up from $16 billion in 2020. The manner industry is envisioned to touch $124 billion—up from $54 billion in 2020.
Nowadays, Nykaa has 73 suppliers throughout 38 metropolitan areas in India and distributes 1,350 manufacturers. It also has its have non-public label assortment with every thing from fragrances to style clothing, but the bulk of profits occur from its web-site and applications.
Practically 87% of Nykaa’s gross products benefit in fiscal 2021 was created by its cell apps. And on line buyers used nearly 100 million hrs on its particular treatment and fashion internet websites like Nykaa Tv on youtube.com Nykaa Community and Nykaa Natural beauty Guide.
Nayar’s entrepreneurial journey started in 2012 immediately after she’d spent much more than 20 decades at Kotak Mahindra Bank supporting business owners go after their IPO dreams. That sooner or later stoked her ambition to begin her personal organization. Just after learning the industry, she understood that a reliable retailer of branded cosmetics, this sort of as Sephora, did not exist in India.
Nayar had turn into a loyal Sephora purchaser on her regular visits to the U.S., where her twins had been researching amongst 2004 and 2008. (Both do the job with her now.) She figured that though drugstore chains like CVS Pharmacy also marketed magnificence products and solutions, Sephora had the edge mainly because salespeople at its outlets ended up so valuable and customer-welcoming. Nayar determined that an Indian-version of Sephora was a timely plan. “This had a lot of likely but I realized I’d have to generate the sector,” Nayar stated in an interview to Forbes Asia in 2019.
Based mostly on her financial commitment banking practical experience, she immediately sized up the marketplace possible but “I didn’t know elegance or tech or retail,” she mentioned at that time. Nayar overcame that by becoming an avid customer of cosmetics herself and consulting with tech authorities, then took the plunge. She begun Nykaa as an on the internet retailer, incorporating high avenue merchants when it experienced established its identify.
Startups like Nykaa have caught investors’ fancy these days and a slew of IPOs are established to hit the stock industry. Foodstuff shipping agency Zomato, which has however to develop into lucrative, manufactured a thundering debut in July, listing at a valuation of $12.2 billion. Revenue-making Nykaa would seem to be well-groomed by Nayar for reaping IPO riches.