Veteran expenditure banker-turned-entrepreneur Falguni Nayar, whose attractiveness retailer Nykaa is poised to start its IPO, has come to be India’s latest billionaire. A pre-IPO personal placement in June valued Nykaa at $2.3 billion, putting Nayar in the three comma club with an estimated net worthy of of $1.1 billion.
The listing, which could worth the 9-12 months-aged corporation at an estimated $4.5 billion or much more, would be a large windfall for Nayar, propelling the really worth of her original $2 million investment even more.
As for every the draft purple herring prospectus, which was submitted with the stock sector regulator this week, the enterprise is trying to get to elevate $71 million by way of a clean problem of shares and is also proposing to provide 43.11 million shares by current shareholders (like Nayar). The IPO will consequence in a substantial payoff for Nykaa’s early traders, this kind of as client products billionaire Harsh Mariwala and Hong Kong-primarily based commodities billionaire Harindarpal Singh Banga.
Nayar, 58, the founder, taking care of director and CEO of the Mumbai-centered on the internet seller of cosmetics and clothing, owns 54% of the enterprise, alongside with her partner Sanjay Nayar, India CEO of U.S. non-public equity big KKR, and their two children. The IPO is well-timed as Nykaa has not too long ago turned rewarding, generating it an attractive proposition for buyers.
Amid pandemic-induced lockdowns, individuals stuck at residence went on an on-line searching binge, purchasing every thing from lipsticks and mascaras to pores and skin care lotions. That procuring surge boosted Nykaa’s annual income to $334 million for the fiscal yr finished March 2021, up from $236 million in the preceding fiscal 12 months. The business described internet earnings of $8 million in that same interval compared to a internet decline of $2 million in fiscal 2020.
Nayar is wanting to deploy the IPO proceeds into brick and mortar—new warehouses and stores—as perfectly as for improving Nykaa’s brand visibility. Nykaa, derived from the Sanskrit term “Nayaka” that means somebody in the highlight, developed a market for itself by advertising luxury elegance manufacturers like Estee Lauder, Clinique and Bobbi Brown by using its unlimited on the internet aisles.
Nayar is now looking to deepen Nykaa’s presence on the ground as far more aspiring Indians latch on to elegance goods. According to estimates by Bangalore-dependent RedSeer Administration Consulting, the Indian splendor and own care current market is predicted to hit $28 billion in 2025, up from $16 billion in 2020. The manner sector is predicted to contact $124 billion—up from $54 billion in 2020.
These days, Nykaa has 73 stores throughout 38 metropolitan areas in India and distributes 1,350 models. It also has its individual personal label assortment with everything from fragrances to fashion apparel, but the bulk of revenue come from its web-site and applications.
Just about 87% of Nykaa’s gross products value in fiscal 2021 was created by its cellular applications. And on the net purchasers put in approximately 100 million several hours on its personal care and trend internet sites like Nykaa Tv set on youtube.com Nykaa Community and Nykaa Attractiveness E book.
Nayar’s entrepreneurial journey started in 2012 immediately after she’d spent a lot more than 20 years at Kotak Mahindra Financial institution helping business owners go after their IPO dreams. That inevitably stoked her ambition to commence her very own company. Immediately after studying the market place, she realized that a reputable retailer of branded cosmetics, this sort of as Sephora, did not exist in India.
Nayar experienced turn out to be a loyal Sephora buyer on her repeated visits to the U.S., wherever her twins had been studying among 2004 and 2008. (Both equally perform with her now.) She figured that when drugstore chains like CVS Pharmacy also marketed attractiveness goods, Sephora experienced the edge for the reason that salespeople at its shops ended up so useful and client-welcoming. Nayar determined that an Indian-model of Sephora was a well timed notion. “This had a great deal of possible but I realized I’d have to develop the marketplace,” Nayar reported in an interview to Forbes Asia in 2019.
Dependent on her investment banking encounter, she rapidly sized up the current market prospective but “I did not know splendor or tech or retail,” she said at that time. Nayar overcame that by starting to be an avid consumer of cosmetics herself and consulting with tech gurus, then took the plunge. She started out Nykaa as an on the net retailer, including higher street outlets as soon as it had set up its name.
Startups like Nykaa have caught investors’ extravagant lately and a slew of IPOs are established to strike the inventory market place. Meals shipping and delivery organization Zomato, which has nevertheless to come to be worthwhile, designed a thundering debut in July, listing at a valuation of $12.2 billion. Profit-generating Nykaa appears to be nicely-groomed by Nayar for reaping IPO riches.