Nykaa IPO: Beauty retailer aims to list at $4.5 billion valuation

Beauty retailer Nykaa is expected to come out with an IPO (Initial Public Offering) later this fiscal at a valuation of $4.5 billion, which is a steep rise from its earlier valuation of over $3 billion. This latest development comes as the multi-brand e-commerce fashion platform has gained from a significant shift towards online sales during the COVID-19 pandemic.

An Initial Public Offering (IPO) or stock market launch is a public offering in which shares of a company are sold to institutional investors and usually also retail investors. An IPO is typically underwritten by one or more investment banks, who also arrange for the shares to be listed on one or more stock exchanges

Nykaa to go public later in FY22

Nykaa’s holding company FSN Ecommerce Ventures Pvt Ltd is slated to file in the draft red herring prospectus by the end of July or early June and the IPO is subsequently expected to take off in the final quarter of the ongoing fiscal.

As per Mint reports, the public offer will be coupled with an offer for sale to provide an exit to existing investors. Despite the fact that the price band is yet to be decided, a 10-20 per cent stake of the company could be offered to the public for an adequate free float. Kotak Mahindra Capital Co along with Morgan Stanley has been roped in to manage the e-commerce platform’s IPO.

Several major companies such as Delhivery, Zomato, Grofers, Pepperfry amongst others are eyeing public listing this year. In fact, India’s digital payments giant Paytm too is set to go public around Diwali this year in order to raise Rs 21,800 crore in what could be the country’s largest IPO ever.

Nykaa was founded by Falguni Nayar in 2012. It is India’s top women-centric online marketplace with around 15 million registered users and caters to 1.5 million orders a month. Nykaa has been able to carve out a niche for itself through excessive focus on the beauty and personal care segment, which differentiates it from horizontal e-commerce companies like Flipkart and Amazon.

(Image: Instagram- @Vrambarsar, Facebook- @Nykaa)