Nykaa IPO: A Detailed Guide

India’s leading omnichannel beauty and wellness retailer, Nykaa, is looking to get listed on the stock exchange. The company is seeking a valuation of $3.5 billion and is looking to raise around $500 million from its initial listing. Nykaa is betting on banks and financial institutions like Kotak Mahindra Capital and Morgan Stanley for its initial IPO launch. 

The Mumbai-based company was founded by ex-investment banker Falguni Nayar, who has been at the helm since the company’s inception in 2012. The company has recently been making waves in the online self-care niche with more and more funding coming in from offshores, and with aggressive plans of expansion for FY2022, it would seem Nykaa’s time for a superhit IPO launch is here. An ambitious launch would help Nykaa improve profitability and expand the scope of its business.

The company is set to go public by the end of this year or at the most by the beginning of 2022. Nykaa’s IPO launch date was announced right after it acquired jewelry brand Pipa in April 2021. The brand is quickly adding banks and merchant bankers to its IPO bucket, due to which the details of the IPO could change multiple times before it even reaches the launch month.

Nykaa’s success as a unicorn brand has got many investors more than interested. We have listed down everything that you may need to know regarding:

–          Nykaa’s IPO

–          Nykaa IPO launch date

–          Nykaa IPO expected share price

However, first, let us run through Nykaa’s evolution to date and understand the business.

Nykaa Company Details

Nykaa was incorporated in 2012 and was seed-funded by Falguni Nayar, her friends, and her family. The company began as an online channel for beauty and wellness products. In 2015, Nykaa expanded to the offline retail space, and it currently has 70 stores across the country. In 2017, the company started housing luxury brands including Tom Ford, Dior, and Givenchy.

The Premium segment accounts for 45% of Nykaa’s revenue today. It is currently India’s largest women-oriented marketplace with over 1.5 million users. Nykaa receives around 1.7 million orders per month. The company has over 1,200 brands with categories such as makeup, health supplements, and skin care, among various others. 55 million people visit Nykaa’s online store every month, and it has 6 warehouses to fulfill orders across the country.

Nykaa’s Value Proposition
Omni-channel presence	Fast delivery
Reasonable Prices	Customer discounts and loyalty points
A millennial brand	Quick settling customer service
Wide assortment of products	Remote and digital

Let’s look at how Nykaa rose over the last nine years:

• Nykaa began with a seed investment of INR 42 lakh in April 2012. Lead investors included Falguni Nayar, Omprakash Nayar, and Rashmi Mehta.
• Angel investors showed interest in July 2014, and the company received funding of INR 20 crore from Indra Singh Banga and Harindarpal Singh Banga. The company sold 16.7% of its stake during the Series A funding, and the share price stood at INR 97.4.
• Series B funding began in July 2015 with a funding of INR 59.6 crore. The lead investor was TVS Capital. 11.8 of the company’s stakes were sold, and the share price stood at INR 358.
• Nykaa grew to become the largest omnichannel marketplace for women in 2019. The company received 100 crores in its Series E funding, with the lead investor being TPG Growth. The share price stood at INR 3,530.
• Nykaa became a unicorn company in 2020 and gained funding of INR 166.6 crore for a 1.6% stake in the Series E3 round of investment. The lead investor was Steadview Capital.
• Nykaa acquired Pipa Bella, an online jewellery brand, in April 2021 and announced that it would go public.

Nykaa’s Revenue  (in Billion Indian National Rupees)	FY2017	FY2018	FY2019	FY2020
	2.14	5.1	12	18.6

Nykaa has proliferated over the last nine years, and hence, shows a lot of promise for investors. With leading banks and financial institutions as managers of the IPO, the company is likely to achieve its funding goals.

Nykaa was valued at around $1.8 billion in November 2020. With this IPO, the estimated valuation of the company is expected to be more than twice at around $3.5 billion. Along with the IPO, the company is also going to put up an OFS to provide a lucrative return to its existing investors in exchange for their shares, while new investors will look to invest and gain in the future from Nykaa’s IPO. While not verifiable, it is expected that the company will offer around 10-20% of its stake for the IPO.

 About the IPO

Nykaa is hoping to get a valuation of $3.5 billion and raise $500-$700 million with its IPO. It has on boarded Kotak Mahindra Capital and Morgan Stanley to manage the IPO. Hero Enterprise, Research Co., and Fidelity Management are also backing the Nykaa IPO. The company is looking at listings on both the BSE (Bombay Stock Exchange) as well as the NSE (National Stock Exchange).

Nykaa also received funding from a Boston-based firm in November 2020. This brought Nykaa’s value to $1.8 billion. The COVID-19 pandemic saw Nykaa’s sales increase online, which will most likely be the reason for the company’s overall profitability.

With the e-commerce sector seeing success during the pandemic, Nykaa is expecting to register a growth of nearly 40% in this quarter. Nykaa will be following quite a few other e-commerce businesses such as Flipkart, Pepperfry, and Zomato to join the capital market. It is most likely that the reception for Nykaa’s IPO will be overwhelming. 

Nykaa IPO Launch Date

The launch date for Nykaa IPO has not been announced yet. The tentative Nykaa IPO launch date is either in the latter half of 2021 or at the beginning of 2022. There are speculations about institutional investors, including Hero Enterprise and Research Co., but all the players and number of investors have not been finalized yet. If the IPO is launched in 2021, it is sure to be one of the highlights of this year as the IPO is expected to draw several investors.

Nykaa IPO Expected Share Price

The expected share price for Nykaa IPO has not been announced yet. However, Nykaa’s IPO expected share price is being touted to be nearly three times what the investors may have initially paid. The company hasn’t filed its draft prospectus yet; however, the market seems to be excited about the Nykaa IPO already, with speculations that it might just be the biggest IPO to hit in December this year.

Falguni Nayar, the chairman of Nykaa, is a former investment banker and has helped other companies with their IPO as well. Considering her prudence with the stock market, investing in Nykaa stocks seems to be a safe choice. Investors are waiting with bated breath for Nykaa’s IPO expected share price as it appears that Nykaa’s business operations can give it a huge boost.

How To apply for Nykaa IPO with TradeSmart

Nykaa IPO seems to be ticking all the right boxes and is expected to garner a tremendous response. The best way to apply for Nykaa IPO would be through your Demat account. TradeSmart offers an easy way to participate in the markets.

If you are wondering how to apply for the Nykaa IPO, TradeSmart can ease your process by being your online stock market companion. TradeSmart offers an easy interface to stock market enthusiasts to not just apply for an IPO but also to conduct all their stock market-related activities therein.

Following are the steps to apply to Nykaa IPO:

• You can apply to Nykaa IPO by logging into the Box app and linking any supported UPI app such as Amazon Pay, Google Pay, Paytm UPI, and various others.
• Under Portfolio on the Hamburger menu, go to the IPO section. In this menu, you will be able to view current as well as upcoming IPOs. You will be able to view the Nykaa IPO expected share price here near its release. Apply to Nykaa IPO from the list of IPOs and click on the ‘Bid’ option.
• Before you begin investing, link TradeSmart with your UPI ID. Make sure that your bank account and UPI ID are linked. Your bank account and UPI cannot be different as third-party bank accounts are not accepted. You can begin placing bids once your UPI ID is linked with TradeSmart.
• You place bids in multiples of the lot size, and an ideal practice is to bid at the cut-off price. You can also enter a price of your choice by editing the price field.
• After placing your bidding tick, you will be required to check the box to confirm that you’ve read and understood the Red Herring Prospectus and other documents, and then click on continue.
• Accept the mandate for withdrawal of funds from your UPI account. It may take up to 3 working days for your payments to be reflected.
• The stock exchange will send you an SMS to confirm your application. Your bid status can also be tracked on TradeSmart’s My Application tab.
• You can download the client mast that has your Demat account details that you need to enter while applying for an IPO.

If you are wondering how to apply for Nykaa’s IPO, TradeSmart has got you covered. It is a user-friendly and hassle-free process that makes investing in IPOs a breeze.