Falguni Nayar, the company’s founder, aims to sell little over 10% of the company’s stock, potentially raising $400 million or more.
With her husband and children, Nayar, a former investment banker, controls nearly half of the company. If the Nykaa IPO goes as anticipated, their owners may be worth more than $2 billion.
According to persons familiar with the situation, India’s Nykaa is preparing to file for an initial public offering (IPO) that could value the company at more than $4 billion, highlighting the country’s growing interest in technology.
According to the people, the country’s top beauty e-commerce company, founded by Falguni Nayar, plans to file its draft red herring prospectus (DRHP) in the coming days. According to one of the people, the company plans to sell just over 10% of its stock, raising $400 million or more.
Falguni Nayar has spent years guiding Indian company founders through roadshows in Europe and the United States on their journey to stock market debuts. Now, the former investment banker is leading her own company to a historic IPO.
Nykaa, her idea, has evolved into India’s biggest beauty e-commerce site, with Bollywood stars endorsing it and a devoted following among twenty-somethings.
“I was inspired by those die-hard founders,” Nayar said in a recent interview. “Our message to women has been that the spotlight of her life should be on herself. You are important in your story and should feel no guilt at being center stage.”
The message struck a chord. The Mumbai-based firm, which was founded in 2012, currently has over 2,500 brands.
According to its report, the company generated revenue and other income of Rs 24.5 billion ($330 million) in the fiscal year ending in March through its websites, applications, and 70-plus brick-and-mortar stores.
Despite pandemic-related store closures and shipping issues, this figure increased by more than 35% over that time period. The business is a success.
Nykaa would be India’s first women-led unicorn to go public if the IPO proceeds as planned. With her husband and twin children owning nearly half of the company, Nayar’s stake could be worth more than $2 billion if the startup meets or exceeds initial predictions.
Arvind Singhal, head of Technopak Advisors Pvt, a major consultancy business, said, “It was a niche waiting to be exploited and Falguni’s plunged straight in.” “With each passing generation, India’s young population has higher expectations, and women from all social strata are more empowered.”
Nayar’s goal was to build a smooth, integrated shopping experience that allowed customers to shop online or in physical stores based on their needs at the time. They may acquire tuition from superstars like Janhvi Kapoor and Debasree Banerjee on the internet.
In contrast to other e-commerce businesses, Nykaa refused to lower pricing to attract customers.
“We didn’t want to be a discount store,” Nayar said. “We’d rather sell the right color of lipstick at full price, than the wrong shade at half off which would make the buyer unhappy within minutes of wearing.”.
The level of competition is increasing. Amazon.com Inc. and Walmart Inc.-controlled Flipkart Online Services Pvt. and specialty retailers like LVMH’s Sephora are expanding in the $15 billion cosmetics market. Goldman Sachs Group Inc. has backed local rival Purplle.
Nykaa’s strategy has been to spend on technology, marketing, and product extensions to maintain its position. Like Netflix Inc.’s movie recommendations, its online offerings use algorithms to recommend things based on what users have already purchased.
It’s used to cut unique tie-ups with international brands. As the market grew, global brands such as Estee Lauder Cos. and MAC Cosmetics Inc. began the sales of their products in India.