Veteran expenditure banker-turned-entrepreneur Falguni Nayar, whose natural beauty retailer Nykaa is poised to launch its IPO, has grow to be India’s most recent billionaire. A pre-IPO personal placement in June valued Nykaa at $2.3 billion, putting Nayar in the a few comma club with an believed internet worth of $1.1 billion.
The listing, which could price the nine-yr-aged business at an estimated $4.5 billion or much more, would be a big windfall for Nayar, propelling the truly worth of her first $2 million investment even more.
As per the draft crimson herring prospectus, which was submitted with the inventory market place regulator this 7 days, the firm is in search of to increase $71 million by way of a new challenge of shares and is also proposing to provide 43.11 million shares by present shareholders (which includes Nayar). The IPO will consequence in a substantial payoff for Nykaa’s early buyers, this kind of as client products billionaire Harsh Mariwala and Hong Kong-based mostly commodities billionaire Harindarpal Singh Banga.
Nayar, 58, the founder, controlling director and CEO of the Mumbai-dependent on-line vendor of cosmetics and clothing, owns 54% of the corporation, along with her spouse Sanjay Nayar, India CEO of U.S. non-public equity huge KKR, and their two young children. The IPO is nicely-timed as Nykaa has just lately turned lucrative, generating it an eye-catching proposition for investors.
Amid pandemic-induced lockdowns, customers caught at dwelling went on an on the net purchasing binge, purchasing everything from lipsticks and mascaras to pores and skin treatment creams. That browsing surge boosted Nykaa’s yearly profits to $334 million for the fiscal calendar year finished March 2021, up from $236 million in the past fiscal calendar year. The enterprise reported web profit of $8 million in that same period versus a web decline of $2 million in fiscal 2020.
Nayar is wanting to deploy the IPO proceeds into brick and mortar—new warehouses and stores—as nicely as for boosting Nykaa’s brand name visibility. Nykaa, derived from the Sanskrit word “Nayaka” meaning somebody in the spotlight, created a area of interest for by itself by promoting luxury beauty brands like Estee Lauder, Clinique and Bobbi Brown by means of its countless on the internet aisles.
Nayar is now seeking to deepen Nykaa’s presence on the floor as more aspiring Indians latch on to beauty goods. In accordance to estimates by Bangalore-centered RedSeer Management Consulting, the Indian splendor and own treatment sector is anticipated to hit $28 billion in 2025, up from $16 billion in 2020. The trend industry is expected to touch $124 billion—up from $54 billion in 2020.
Right now, Nykaa has 73 shops throughout 38 metropolitan areas in India and distributes 1,350 manufacturers. It also has its individual non-public label vary with everything from fragrances to fashion apparel, but the bulk of income occur from its website and applications.
Virtually 87% of Nykaa’s gross items value in fiscal 2021 was created by its cellular applications. And online customers expended almost 100 million several hours on its own treatment and trend internet sites like Nykaa Television on youtube.com Nykaa Network and Nykaa Magnificence Book.
Nayar’s entrepreneurial journey started out in 2012 immediately after she’d spent more than 20 many years at Kotak Mahindra Bank aiding business owners pursue their IPO goals. That eventually stoked her ambition to commence her very own enterprise. Right after finding out the industry, she realized that a reputable retailer of branded cosmetics, this kind of as Sephora, did not exist in India.
Nayar had grow to be a faithful Sephora customer on her frequent visits to the U.S., where by her twins were being researching between 2004 and 2008. (Equally work with her now.) She figured that though drugstore chains like CVS Pharmacy also offered beauty solutions, Sephora had the edge simply because salespeople at its shops ended up so helpful and shopper-welcoming. Nayar decided that an Indian-model of Sephora was a timely plan. “This experienced a good deal of probable but I knew I’d have to make the industry,” Nayar mentioned in an interview to Forbes Asia in 2019.
Primarily based on her expense banking experience, she promptly sized up the marketplace probable but “I didn’t know attractiveness or tech or retail,” she claimed at that time. Nayar overcame that by getting to be an avid buyer of cosmetics herself and consulting with tech gurus, then took the plunge. She commenced Nykaa as an on the net retailer, adding significant avenue merchants at the time it had founded its title.
Startups like Nykaa have caught investors’ extravagant currently and a slew of IPOs are established to strike the inventory market. Meals supply company Zomato, which has still to become successful, manufactured a thundering debut in July, listing at a valuation of $12.2 billion. Gain-producing Nykaa appears to be very well-groomed by Nayar for reaping IPO riches.