Veteran expense banker-turned-entrepreneur Falguni Nayar, whose beauty retailer Nykaa is poised to start its IPO, has develop into India’s latest billionaire. A pre-IPO private placement in June valued Nykaa at $2.3 billion, putting Nayar in the a few comma club with an believed internet really worth of $1.1 billion.
The listing, which could price the nine-calendar year-old company at an estimated $4.5 billion or far more, would be a enormous windfall for Nayar, propelling the really worth of her initial $2 million investment even additional.
As per the draft crimson herring prospectus, which was filed with the stock marketplace regulator this week, the company is looking for to increase $71 million as a result of a new problem of shares and is also proposing to provide 43.11 million shares by present shareholders (including Nayar). The IPO will consequence in a substantial payoff for Nykaa’s early traders, these kinds of as client merchandise billionaire Harsh Mariwala and Hong Kong-dependent commodities billionaire Harindarpal Singh Banga.
Nayar, 58, the founder, controlling director and CEO of the Mumbai-dependent on the web vendor of cosmetics and attire, owns 54% of the business, together with her spouse Sanjay Nayar, India CEO of U.S. personal fairness giant KKR, and their two little ones. The IPO is nicely-timed as Nykaa has not long ago turned profitable, creating it an attractive proposition for buyers.
Amid pandemic-induced lockdowns, customers trapped at property went on an on-line searching binge, purchasing anything from lipsticks and mascaras to skin care lotions. That buying surge boosted Nykaa’s once-a-year profits to $334 million for the fiscal yr ended March 2021, up from $236 million in the past fiscal year. The firm documented internet gain of $8 million in that identical time period vs . a web decline of $2 million in fiscal 2020.
Nayar is searching to deploy the IPO proceeds into brick and mortar—new warehouses and stores—as effectively as for boosting Nykaa’s manufacturer visibility. Nykaa, derived from the Sanskrit word “Nayaka” that means anyone in the spotlight, designed a niche for alone by providing luxury natural beauty manufacturers like Estee Lauder, Clinique and Bobbi Brown by means of its countless online aisles.
Nayar is now wanting to deepen Nykaa’s presence on the ground as more aspiring Indians latch on to attractiveness goods. In accordance to estimates by Bangalore-primarily based RedSeer Administration Consulting, the Indian elegance and individual care sector is predicted to strike $28 billion in 2025, up from $16 billion in 2020. The vogue current market is envisioned to touch $124 billion—up from $54 billion in 2020.
These days, Nykaa has 73 shops across 38 towns in India and distributes 1,350 brands. It also has its possess private label range with every thing from fragrances to vogue apparel, but the bulk of profits arrive from its website and apps.
Almost 87% of Nykaa’s gross merchandise price in fiscal 2021 was created by its cellular apps. And on line customers expended practically 100 million several hours on its particular treatment and style websites like Nykaa Tv on youtube.com Nykaa Community and Nykaa Splendor Ebook.
Nayar’s entrepreneurial journey started off in 2012 after she’d put in much more than 20 many years at Kotak Mahindra Bank aiding business people pursue their IPO goals. That at some point stoked her ambition to start off her own business enterprise. Following learning the marketplace, she realized that a responsible retailer of branded cosmetics, this sort of as Sephora, did not exist in India.
Nayar experienced turn into a faithful Sephora client on her regular visits to the U.S., wherever her twins ended up learning concerning 2004 and 2008. (Both equally function with her now.) She figured that while drugstore chains like CVS Pharmacy also offered attractiveness goods, Sephora experienced the edge since salespeople at its shops had been so practical and shopper-welcoming. Nayar made the decision that an Indian-model of Sephora was a timely strategy. “This experienced a ton of opportunity but I understood I’d have to generate the industry,” Nayar reported in an interview to Forbes Asia in 2019.
Based mostly on her investment decision banking knowledge, she quickly sized up the market place probable but “I didn’t know beauty or tech or retail,” she said at that time. Nayar overcame that by turning into an avid purchaser of cosmetics herself and consulting with tech industry experts, then took the plunge. She started Nykaa as an on line retailer, including large street stores when it experienced proven its title.
Startups like Nykaa have caught investors’ extravagant these days and a slew of IPOs are established to hit the inventory market place. Meals delivery agency Zomato, which has nevertheless to turn into worthwhile, built a thundering debut in July, listing at a valuation of $12.2 billion. Revenue-building Nykaa seems to be effectively-groomed by Nayar for reaping IPO riches.