Beauty startup Nykaa files papers to raise funds via IPO

The Nykaa IPO will comprise fresh issue of shares of up to Rs 525 crore and an offer for sale of up to 4.3 crore shares by existing shareholders.
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Omnichannel lifestyle retailer startup Nykaa has filed a draft red herring prospectus (DRHP) for its initial public offering (IPO) with stock market regulator SEBI.

The Nykaa IPO will comprise fresh issue of shares of up to Rs 525 crore and an offer for sale of up to 4.3 crore shares by existing shareholders. The issue will see promoter Sanjay Nayar Family Trust and other investors such as TPG, Light House India Fund, and JM Financials sell their shares.

Founded by Falguni Nayar in 2012, Nykaa is a profitable startup. It reported a net profit of Rs 62 crore in FY21, as against a loss of Rs 16 crore in FY20.

Nykaa reported a revenue of Rs 2,453 crore for FY21, a 39 per cent rise when compared to Rs 1,768 crore for FY20.

The issue size of Nykaa’s IPO was not disclosed, but it is estimated to be around Rs 4,000 crore.

According to the IPO prospectus, Nykaa said there is a large market opportunity aggregating around $152 billion in the beauty, personal care, and fashion industry by the year 2025.

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. The Indian fashion market is estimated to grow to approximately $124 billion by the calendar year 2025 from $54 billion in the calendar year 2020.

Nykaa has an omnichannel presence with 73 physical stores across 38 cities in three different formats.  It registered 66 crore visits to its beauty and personal care websites and mobile apps in FY21 as compared to 57 crore in FY20.

The reach of the company is not restricted to just metros as it said the contribution to its GMV sales in Tier 2 and Tier 3 cities collectively increased from 56.9 percent in FY19 to 64 percent in FY21.

Nykaa joins the list of other companies from the Indian startup ecosystem who are going public: Paytm, MobiKwik, Cartrade, and PolicyBazaar.

Zomato has already successfully debuted on the Indian stock exchanges.

Edited by Teja Lele Desai

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