SUMMARY
As per the ecommerce unicorn’s red herring prospectus, its IPO will include a fresh issuance of INR 630 Cr and an offer for sale (OFS) of up to 41,972,660 shares
The company will raise funds in the range of INR 4,554.03 Cr- INR 5,351.92 Cr
It had received market regulator’s nod for the IPO last week
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FSN E-commerce Ventures, which runs the online lifestyle marketplace Nykaa will open its initial public offering (IPO) on October 28. The band is expected to be fixed at INR 1,085-1,125 per share, said people aware of the development.
As per the startup’s red herring prospectus (RHP), its IPO will include a fresh issuance of INR 630 Cr and an offer for sale (OFS) of up to 41,972,660 shares.
The offering will close on November 1, 2021.
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 later raised its fresh issue size.
At the estimated price band, the company will raise funds in the range of INR 4,554.03 Cr – INR 5,351.92 Cr.
Under the OFS, Sanjay Nayar Family Trust, the company’s promoter is offering up to 4.8 Mn shares. Nykaa’s investors — TPG Growth IV SF Pte Ltd and Lighthouse India Fund III would sell up to 5.421,510, and 4,844,620 shares, respectively.
Unlike most Indian startups that have filed the DRHP, Nykaa’s promoters continue to hold over 50% share in the company.
Falguni Nayar, the founder of the ecommerce unicorn, along with her husband Sanjay Nayar, their children Anchit Nayar and Adwaita Nayar hold 53.5% share in the company, as per the DRHP.
The company received SEBI’s nod for the IPO last week.
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, and Flipkart.
Nykaa entered the unicorn club in 2020 when it raised INR 100 Cr ($13 Mn) from 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 unicorn 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. Purchase of traded goods contributed the highest to the total expenses i.e. INR 1,495.6 Cr in FY21.
Manan Doshi, cofounder of Unlisted Arena said, “After a small halt, the primary market is set to witness mega startup IPOs. The market looks enthusiastic for the Nykaa IPO as unlike the cash-burning and loss-making startups, Nykaa is a profitable one.”
“Promoters’ quality, profitability and fancy for Startup IPOs seems to be an icing on the cake,” he said.
With its much-anticipated IPO, Nykaa would join the list of new-age companies like Zomato, Nazara and CarTrade which got listed on the Indian stock exchanges.
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