Image Credit: twitter.com/MyNykaa , The Economic Times
Indian lifestyle retailer Nykaa is looking at launching an Initial Public Offering(IPO) with aim of getting a valuation of $4.5 billion. This would be a big jump from January 2021 when the company was valued at $3 billion. Nykaa is expected to file for an IPO with the regulator in July and can get listed at the stock exchange by March 2022.
The beauty startup seems to have gained from the coronavirus pandemic as a large number of customers have shifted to online shopping for various purposes including beauty products. Last year the company was among the eleven Indian startups to become unicorns( getting a valuation of more than $ 1 billion) after it raised $25 million from Steadview Capital.
According to various sources, Nykaa will file its draft red herring prospectus in the month of June or July and will get listed at the share market by the end of the current fiscal in March 2022. The beauty retailer has recruited Kotak Mahindra Capital Co. and Morgan Stanley for managing the process of filing the IPO.
According to market regulator SEBI’s rules, only if a company has remained profitable for the past three years can get listed. This has been the case with Nykaa. The company generated a net profit of Rs 2.31 crore in the fiscal year 2019 and a profit before tax of Rs 94 crore the following year. In the financial year 2021, the company is expected to double its revenue, getting a boost by a second lockdown in two years triggering increased online sales.
Founded in 2012 by investment banker Falguni Nayar, Nykaa has grown rapidly over the years reaching a milestone of 15 million users and fulfilling 1.5 million orders every month.
“Globally, fashion and lifestyle businesses have remained unscathed by the pandemic. Nykaa, like similar players outside India, has demonstrated phenomenal growth. It will have a first-mover’s advantage when it lists,” says Sudip Bandopadhyay, chairman of Inditrade Capital.