Nykaa files DHRP with SEBI; looks to raise Rs 3,500-4,000 Cr from fresh IPO

FSN E-Commerce Ventures, which owns beauty aggregator platform Nykaa, has now filed preliminary papers with market regulator Sebi. According to the online beauty and wellness products company’s draft red herring prospectus, the filing will be done to raise Rs 3,500-4,000 crore through an initial share sale. Nykaa has sought allowance for an initial public offering (IPO) comprising a fresh issue of equity shares worth Rs 525 crore and an offer for sale (OFS) of 43,111,670 equity shares by promoters and existing shareholders.

Nykaa IPO soon

Beauty retailer Nykaa is now in plans to roll out its IPO and go private by 2022. According to merchant banking sources, the company’s initial share sale is expected to fetch Rs 3,500-4,000 crore valuing the company in the range of USD 5 billion to USD 5.5 billion. With Nykaa IPO, the company will join the league of start-up technology giants with public offerings like Paytm, MobiKwik and PolicyBazaar which have filed their IPO papers with Sebi after the successful listing of Zomato.

A leader among influential lifestyle platforms in India, Nykaa had over 12.6 million followers across leading social media platforms as of March 2021. The company, which is now coming out with an IPO, has reported a net profit of Rs 61.94 crore for FY21 compared to a net loss of Rs 16.34 crore in FY20. Its revenue from operations growth is also on the positive side as it jumped from Rs 1,768 crore in FY20 to Rs 2,441crore in FY21. The equity shares of the company once listed will be up on the BSE and NSE.

IPO to further strengthen Nykaa's market position

Founded in 2012 by Falguni Nayar, FSN E-Commerce Ventures, which owns Nykaa, is now in plans to widen its business horizons. Based on the draft paper, the retailing giant plans to use the proceeds from the IPO for expansion, by setting up new retail stores and establishing new warehouses for further growth. The company also plans to finish off some debts, which will further add to its profitability.

The company, which holds a diverse portfolio of beauty, personnel care and fashion products, will look at further strengthening its business model with the upcoming Nykaa IPO. Apart from its two business verticals  Nykaa and Nykaa Fashion, the company will focus on strengthening its 13 subsidiary brands including Nykaa Cosmetics, Nykaa Naturals and Kay Beauty along with promoting new brands to be added under its umbrella. Earlier in April, Nykaa Fashion had acquired online jewellery brand Pipa Bella, further strengthening its market. It had also acquired the brand Twenty Dresses.

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