Falguni Nayar, a veteran investment banker turned businessman, has become India’s newest billionaire and his beauty retailer Nykaa is preparing to launch an initial public offering. The June private placement prior to the IPO valued Nykaa at $ 2.3 billion, making Nayar a member of the three comma club with an estimated net worth of $ 1.1 billion.
The listing can make the nine-year-old company worth or more than US $ 4.5 billion, which will be a huge windfall for Nayar, further promoting its initial investment value of US $ 2 million.
According to the draft Red Herring prospectus presented to stock market regulators this week, the company seeks to raise $ 71 million through a new share issue and is proposing to sell 43.11 million shares of existing shareholders (including Nayar). be Nykaa Early investors in China made huge profits, such as consumer goods billionaire Harsh Mariwala and Hong Kong commodity billionaire Harindarpal Singh Banga.
Nayar, 58, is the founder, CEO and CEO of an online retailer of cosmetics and clothing in Mumbai and owns 54% of the company. Her husband, the Indian CEO of American private equity giant KKR, Sanjay Nayar, and their two sons own 54% of the shares in the company. The IPO is at the right time as Nykaa has recently reached profitability, which is an attractive proposition for investors.
During the lockdown caused by the pandemic, consumers trapped at home frantically shopped, asking for everything from lipstick and mascara to skin cream. This shopping boom has increased Nykaa’s annual revenue for the fiscal year ending March 2021 to US $ 334 million from US $ 236 million in the previous fiscal year. The company reported a net profit of US $ 8 million for the same period and a net loss of US $ 2 million for fiscal year 2020.
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in the Nykaa store and became billionaire through initial public offering.
ANINDITO MUKHERJEE / BLOOMBERG
Nayar seeks to use IPO proceeds for physical stores (new warehouses and stores) and increase awareness of the Nykaa brand. Nykaa is derived from the Sanskrit word “Nayaka”, which means a person under the spotlight. She sells luxury beauty brands like Estee Lauder, Clinique, and Barbie Brown through her endless online channels, creating a niche for herself.
Nayar now hopes to deepen Nykaa’s local influence, as more aspiring Indians begin to pay attention to beauty products. According to estimates by Bangalore RedSeer Management Consulting, the Indian beauty and personal care market is expected to grow from US $ 16 billion in 2020 to US $ 28 billion in 2025. The fashion market is expected to reach $ 124 billion, up from $ 54 billion in 2020.
Today, Nykaa has 73 stores in 38 cities in India and distributes 1,350 brands. It also has its own collection of private labels, from perfumes to fashion clothing, but most of its sales come from its website and apps.
Nearly 87% of Nykaa’s total merchandise value in fiscal 2021 comes from its mobile apps. Online shoppers spend nearly 100 million hours on personal care and fashion sites like Nykaa TV on youtube.com, the Nykaa network, and Nykaa beauty books.
Nayar’s entrepreneurial journey began in 2012. He has worked at Kotak Mahindra Bank for more than 20 years, helping entrepreneurs pursue their IPO dreams. This eventually inspired his entrepreneurial ambitions. After studying the market, he realized that India does not have a reliable branded cosmetics retailer like Sephora.
Nayar often visits the United States. Her twins studied in the United States from 2004 to 2008, so they became Sephora’s loyal customers. (They are all working with her now). He guessed that although pharmacies such as CVS Pharmacy also sell beauty products, Sephora has an advantage because the sales staff in their stores are very helpful and friendly to customers. Nayar believes that the Indian version of Sephora is a timely idea. “This has a lot of potential, but I know I have to create a market,” Nayar said in an interview with Forbes Asia in 2019.
Based on his investment banking experience, he quickly assessed the potential of the market, but “I did not “I didn’t know anything about beauty, technology or retail,“ she said at the time. Nayar overcame this by becoming an avid cosmetics shopper and consulted technical experts. And then she took the step: she founded Nykaa as an online retailer and added stores. off the street after its popularity. Recently, 4,444 startups like Nykaa have attracted the attention of investors, and a large number of IPOs are expected. Zomato, an unprofitable food delivery company, made its debut in July, with a valuation of USD 12.2 billion. The lucrative Nykaa seems to be fully prepared for Nayar to profit from the IPO.