Nykaa Bets On Kotak, Morgan Stanley For Its $500 Mn IPO Plan

SUMMARY

Nykaa is looking to raise $500 Mn with its IPO, at a valuation of $4 Bn

It is looking to expand its offline presence by betting on private labels like Pipa Bella and Twenty Dresses

Besides Nykaa, Zomaot and PolicyBazaar are looking to hit the public market this year as well

After acquiring jewellery brand Pipa Bella this week, Mumbai-based beauty and lifestyle retailer Nykaa has reportedly selected Kotak Mahindra Capital Co and Morgan Stanely for its initial public offering (IPO) run. The company is looking to raise $500 Mn at a valuation of $4 Bn through the public offering.

Nykaa is said to be looking to go public by the end of the year and could file the draft prospectus for the IPO by June 2021. The details of the offerings such as the size and the timeline could change as the company adds more banks and merchant bankers to its bucket, as per a report by Bloomberg Quint.

The online marketplace for beauty and wellness products was founded by Falguni Nayar in 2012. It expanded to offline retail in 2015 and currently has a network of 70 stores, housing luxury brands like Tom Ford, Jo Malone London Dior and Givenchy. Beyond this, the company is banking on private labels to expand its product lineup and cover more retail ground.

The acquisition of Fireside Ventures-backed online jewellery brand Pipa Bella is an attempt in this direction to capture the growing market for contemporary fashion jewellery in India. Similarly, the acquisition of fashion brand Twenty Dresses back in 2019 also allowed it to expand into the apparel domain.

Currently, Nykaa offers about 5K brands and 130K products through its online and offline channels. It claims to fulfil nearly 1.5 Mn orders a month.

The company turned profitable in the financial year 2019. It had reported a revenue of INR 1,160.98 Cr ($159 Mn, at current conversion rate) with expenses of INR 1,157 Cr ($158.6 Mn, at current conversion rate), leading to a profit of INR 2.31 Cr ($316K, at current conversion rate) in FY2019. It maintained this profitable growth in FY2020 as well, with revenues increasing 60% to INR 1,860 Cr ($254 Mn). The company did not disclose any other details about its financials.

Nykaa was one of the eleven companies to enter the unicorn club last year, after raising $25 Mn in March 2020 from Steadview Capital. The company has raised another undisclosed amount from Fidelity Investments reportedly at a valuation of $1.8 Bn in November.

Now, the company is joining a slew of Indian startups that are going public this year. The list comprises online food delivery unicorn Zomato and online insurance platform PolicyBazaar. In the first four months of the 2021, Nazara Technologies and EaseMyTrip went public.