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India's Nykaa Raises Heavily Oversubscribed $722 Million IPO

November 15, 2021 BeautyMatter
November 15, 2021
Nykaa

Nykaa, India's biggest online marketplace for beauty, raised $722 million in an IPO that was subscribed over 80 times.

WHO: Nykaa founder and CEO Falguni Nayar, a former Managing Director at Kotak Investment Banking, founded Nykaa as an e-commerce platform for beauty and wellness products in 2012. The Mumbai-headquartered company launched offline operations in 2015 and currently has more than 2,500 brands including 13 owned brands and over 70 offline stores. Nykaa has grown to be India's biggest online marketplace for beauty, personal care, and fashion brands.

WHY: The company has said the IPO proceeds will be used for a range of corporate purposes, including investing in FSN Brands or setting up new retail stores. The money may also be for capital expenditures or debt repayment.

DETAILS:

  • The company's IPO raised 53.5 billion rupees ($722 million) through the sale.
  • According to its filing, its sales surged 35% to $330 million, delivering 17.1 million orders in the year ended in March, and is profitable.
  • Founder Falguni Nayar, who owns about half of Nykaa, was worth about $6.5 billion as shares surged as much as 89% when they started trading. Nayar owns her company stake through two family trusts and seven other promoter entities.
  • Morgan Stanley and Kotak Mahindra are global coordinators and book-running lead managers.
  • In late 2020 Nykaa received an undisclosed investment from Boston-based asset management company Fidelity Management & Research Company. The investment was made through a secondary transaction, which gave Nykaa's previous investors and employees a partial exit. Nykaa had raised investments similarly through secondary transactions from actresses Alia Bhatt and Katrina Kaif earlier in the year.
  • In March 2020, Nykaa raised $13 million from Steadview Capital, one of its existing investors, at a $1.2 billion valuation.
  • In 2019, private equity giant TPG's Growth fund invested $14.4 million.
  • In September 2018, Lighthouse India Fund III bought the stake held by TVS Shriram Growth Fund in Nykaa by investing Rs 113 crore ($15.3 million). TVS Shriram was part of the Series B and Series C fund-raise by the Indian beauty retailer in 2015 and 2016.
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