Beauty and fashion retailer Nykaa plans to raise Rs 4,000 crore in an IPO, which would value the company at US$5 billion – US$5.5 billion.
Nykaa, founded in 2012 by Falguni Nayar, a former MD, Kotak Mahindra Capital Company, which sells online and has 70 retail stores, plans to use the proceeds from the IPO in setting up new retail stores and establishing new warehouses as it expands around the country.
The shareholders who are selling a part of their stake in the offering include Sanjay Nayar Family Trust, private equity firm TPG, Lighthouse, JM Financial and Sunil Kant Munjal, chairman of Hero Group. However, most of the investors are not cashing out completely, and will continue to retain some stake in the company post-IPO. The promoter and promoter group will continue to hold more than 51% of the company’s shares after the IPO.
Nayar and her husband Sanjay, Chairman of private equity firm KKR India, hold about 47% of the company through two family trusts. The company reported a profit of Rs 62 crore for the fiscal ended March 31, compared to a loss of Rs 16 crore in the year before. Total revenue jumped 38% to Rs 2,452 crore despite the pandemic last year.
Nykaa has over 1,500 brands with a comprehensive selection of makeup, skincare, haircare, fragrances, and personal care, luxury and wellness products for women and men. It has a portfolio of luxury brands including Bobbi Brown, Estee Lauder and Huda. Nykaa said the contribution from tier 2 and tier 3 cities has increased to 64% in 2020-21, compared to 56.9% in the year before.
Nykaa is also planning to deploy the IPO proceeds for marketing and promotional activities, and to strengthen its 13 owned brands including Nykaa Cosmetics, Nykaa Naturals and Kay Beauty, a collaboration with Bollywood actress Katrina Kaif as well as establishing and promoting new brands.