Beauty & Fashion Ecommerce Unicorn Nykaa Gets SEBI Nod For IPO

SUMMARY

The company is likely to hit the market for its INR 4,000 Cr IPO within the next 10 days, sources told Inc42

It has increased its fresh issue size to INR 630 Cr from its initial value of INR 525 Cr

According to the DRHP, Nykaa posted a profit of INR 61.9 Cr in FY21 against a loss of INR 16.3 Cr in FY20. The ecommerce platform had posted a loss of INR 24.5 Cr in FY19

FSN E-commerce Ventures, which runs the online lifestyle marketplace Nykaa has received the approval of the Securities and Exchange Board of India (SEBI) for its INR 4,000 Cr initial public offering (IPO), an Inc42 source said.

The IPO is likely to hit the public market in the next 10 days, the source added.

Nykaa had filed its draft red herring prospectus with the market regulator in August this year.

According to the company’s DRHP filing, its offer initially included a fresh issue of shares up to worth INR 525 Cr and an offer-for-sale of equity shares up to 43,111,670 equity shares.

However, the company has raised its fresh issue size to INR 630 Cr, its regulatory filings accessed by Inc42 showed.

Unlike most Indian startups that have filed the DRHP, promoters of FSN E-commerce Ventures Limited, continue to hold over 50% share in the company.

Falguni Nayar, the founder of the unicorn ecommerce platform, along with her husband Sanjay Nayar, their children Anchit Nayar and Adwaita Nayar hold 53.5% share in the startup, as per the DRHP.

Founded by former investment banker Nayar in 2012, Nykaa has emerged as a go-to-ecommerce platform for beauty and fashion products. The company competes against heavily invested funded giants such as Amazon, Myntra, Flipkart.

Nykaa entered the unicorn club in 2020 when it raised INR 100 Cr ($13 Mn) from existing investor Steadview capital at a valuation of $1.2 Bn. According to the DRHP, Nykaa posted a profit of INR 61.9 Cr in FY21 against a loss of INR 16.3 Cr in FY20. The ecommerce platform had posted a loss of INR 24.5 Cr in FY19.

The unicorn saw its total income swell to INR 2,452.6 Cr in FY21, a 37.9% rise from INR 1,777.8 Cr in FY20. In terms of expenses, Nykaa posted an INR 2,377.2 Cr in FY21, a 32.7% increase from INR 1,790.2 Cr in FY20. Purchases of traded goods contributed the highest to the total expenses to the tune of INR 1,495.6 Cr in FY21.

With the clearance from SEBI, Nykaa has joined the list of new-age companies like Zomato, Nazara and CarTrade to get listed on the Indian stock exchanges. Recently, the IPOs of Fino Payments Bank and MobiKwik were also approved by the regulator.

The development of increase in fresh issue size was first reported by Entrackr.