Nykaa IPO to open on Thursday; worth band set at Rs 1,085-1,125/share

FSN E-Commerce Ventures Ltd, which operates on-line magnificence e-commerce platform Nykaa, on Monday mentioned it has fastened a worth band of Rs 1,085-1,125 per share for its preliminary public supply (IPO) that opens for subscription later this week.
The IPO will open for subscription on October 28 and conclude on November 1. It includes of fairness shares aggregating as much as Rs 630 crore (contemporary subject) and a proposal on the market of as much as 41,972,660 fairness shares being supplied by the promoting shareholders (supply on the market or OFS), a press release mentioned.
Bids could be made for no less than 12 fairness shares and in multiples of 12 fairness shares thereafter. The supply features a reservation of as much as 250,000 fairness shares for buy by eligible workers, it added.
The firm is reportedly looking for a valuation of over USD 7 billion. Existing traders like reminiscent of TPG Growth IV SF Pte, Lighthouse India Fund and others are anticipated to dump their shares within the IPO.

Promoters, together with founder and CEO Falguni Nayar, at the moment personal greater than 50 per cent share within the firm.
Nykaa had posted a internet revenue of Rs 61.9 crore in FY21 in comparison with a lack of Rs 16.3 crore in FY20. Its complete revenue stood at Rs 2,452.6 crore in FY21 as in opposition to Rs 1,777.8 crore in FY20.
“We are one of India’s leading consumer technology platform… (with) more than 3 million SKUs from 4,000-plus brands and 13 million cumulative transacting consumer base…We do believe that there is a significant headroom available for growth at each level across India’s digital use case funnel,” Nykaa Executive Chairperson, MD and CEO Falguni Nayar mentioned in a briefing.
She defined that whereas the entry to web may be very excessive at 660-690 million shoppers, the net shopper base continues to be at simply 150-180 million.
“This, we believe, is likely to go up over the next five years, with penetration reaching 24-28 per cent of the consumer base…beauty (segment) which is a USD 16 billion business is likely to grow to a USD 28 billion business going forward, and fashion which is a USD 54 billion business today is likely to become USD 124 billion business by 2025,” she said.
Founded in 2012, Nykaa is a digitally native shopper know-how platform, delivering a content-led, way of life retail expertise to shoppers. It has a various portfolio of magnificence, private care and trend merchandise, together with its personal model merchandise manufactured by third social gathering producers.
In FY2021, 17.1 million orders have been positioned on Nykaa’s platform for magnificence and private care merchandise with a complete GMV of Rs 33,804.1 million, a 35.3 per cent enhance over FY2020.
Apart from its on-line presence, the corporate additionally has 38 Luxe shops, 32 On-trend shops and 9 kiosks.
Asked about contribution from offline retail, Nykaa CEO (Beauty E-commerce) Anchit Nayar mentioned pre-pandemic, about 8-10 per cent of the corporate’s enterprise got here from bodily retail.
“I think longer-term as we look to continue be very bullish on physical retail, we (will) continue to expand our physical store network and get to triple digits, we think that longer term steady state that business can contribute anywhere from 12 to 15 per cent of the total business,” he mentioned.
He added that whereas bodily retail channel will make double-digit contribution in the long run, e-commerce will proceed to be the bigger a part of the general enterprise.
The firm proposes to make use of the proceeds from the IPO in direction of buying and retaining prospects by enhancing the visibility and consciousness of its manufacturers, reimbursement of excellent borrowings availed by the corporate and one in all its subsidiaries, establishing new retail shops and establishing new warehouses.
On acquisitions, Falguni Nayar mentioned the corporate will “always be retailer first”, bringing worldwide and Indian manufacturers to shoppers.
“We will be a house of brands with a range of brands across beauty and fashion, that will contribute to a fair percentage of net revenue,” she added.
The GMV contribution of personal manufacturers of Nykaa was about 8 per cent in FY21 and seven.5 per cent within the first quarter of this fiscal.
Nykaa can also be eager on worldwide growth.
“At the moment, we are very keen to go into Middle East where we think there is a lot of affinity to Indian consumption, and in the Middle East we want to take many of our Indian brands, we want to export to these markets like including Kay beauty which could do very well into these markets as well as UK. Europe is another area of opportunity, but we’re going to start with UK,” she mentioned.
Pathak mentioned in the course of the pandemic, the corporate misplaced some quantity of enterprise in direction of the tip of March 2020 and April and May have been constrained by the lockdown that allowed the corporate to solely promote necessities.
The firm rapidly pivoted to a really personalised mannequin, the place relying on the shopper’s location that the platform would present related merchandise and “through that we build back up our business momentum over the next one or two quarters”, she added.

“Coming into the second half of the 12 months, we continued our development momentum and tried to get again into the groove from buyer acquisition perspective.
“And this year, in spite of COVID wave two being there, we believe that because the lockdowns were not nationwide, we could continue our growth momentum where our beauty and personal care business grew 12 per cent q-o-q inspite, and fashion business grew 43 per cent q-o-q,” she famous.