Falguni Nayar seeks valuation of $7.4 billion in IPO for Nykaa

By: WE Staff | Friday, 22 October 2021

Nykaa, an online retailer of cosmetics and personal care products, is planning a three-day initial public offering (IPO) on October 28 to earn up to Rs 5,200 crore.

"An anchor placement of up to Rs 2,340 crore will open on Wednesday (Oct. 27), and the IPO will close on Monday, November 1," one of the people cited above said.

According to the company's draught red herring prospectus (DRHP) certified by the Securities and Exchange Board of India, the Rs 5,200-crore Nykaa IPO includes a primary issue of stock worth up to Rs 630 crore and an offer for sale in which existing shareholders will dispose up to 43.11 million shares (SEBI).

TPG, Light House India Fund, JM Financial, Yogesh Agencies, Sunil Kant Munjal, Harindarpal Singh Banga, Narotam Sekhsaria, and Mala Gaonkar are among the investors who are expected to sell their stakes. Sanjay Nayar Family Trust, the promoter, will sell 4.8 million shares. After the IPO, founder Falguni Nayar and her family will retain a majority ownership. They currently own more than 53% of FSN E-Commerce Ventures, Nykaa's parent company.

Another person familiar with the Nykaa IPO plans said, "The company is seeking a valuation of roughly $7.4 billion in the IPO." The pricing band will be set by early next week, according to this source.

TPG, Light House India Fund, JM Financial, Yogesh Agencies, Sunil Kant Munjal, Harindarpal Singh Banga, Narotam Sekhsaria, and Mala Gaonkar are among the investors who are expected to sell their stakes. Sanjay Nayar Family Trust, the promoter, will sell 4.8 million shares. After the IPO, founder Falguni Nayar and her family will retain a majority ownership. They currently own more than 53% of FSN E-Commerce Ventures, Nykaa's parent company.

“The company is seeking a valuation of around $7.4 billion in the IPO,” said another person aware of the Nykaa IPO details. According to this person, the price band will be decided by early next week.

The issue's book-running lead managers are Kotak Mahindra Capital, BofA Securities, ICICI Securities, Citibank, Morgan Stanley, and JM Financial.

Nykaa is one of India's most profitable retailers. It made a net profit of Rs 61.96 crore in the fiscal year ended March 31, up from a deficit of Rs 16.34 crore the previous year. In FY21, revenue increased by 38% year on year to Rs 2,453 crore. The business had previously stated that it will spend Rs 130 crore of the revenues from the IPO to service its debt and Rs 200 crore to market its brands.