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Nykaa IPO: Falguni Nayar and her family's wealth rises by $3.5 billion in a single day

Nykaa IPO: Falguni Nayar and her family's wealth rises by $3.5 billion in a single day

The 54-year-old ex-investment banker's company valuation soared to $13.5 billion, as per estimates put forth by brokerage firms Angel One and IIFL Securities.

Falguni Nayar, who started Nykaa in 2012, now has the rarest distinction of being India's richest self-made billionaire. Falguni Nayar, who started Nykaa in 2012, now has the rarest distinction of being India's richest self-made billionaire.

Nykaa's CEO and founder, Falguni Nayar's family wealth increased by a whopping $3.5 billion (or around Rs 26,868 crore) in a single day after her profitable internet commerce company made its stellar debut on the bourses. The 54-year-old ex-investment banker's company valuation soared to $13.5 billion, as per estimates put forth by brokerage firms Angel One and IIFL Securities. Angel One had earlier proposed a valuation $7 billion.

Due to the average 96.3 per cent surge at which Nykaa's shares traded on the first day of listing, Nayar and her family trust offices -- which still retains over 50 per cent stake in Nykaa -- now have collective worth of over $7.5 billion, or something close to Rs 54, 831 crore. Before the company went public, Nayar and her family's stake was worth nearly $4 billion, or Rs 27, 962 crore.

Various members of the promoter group of Nykaa include Falguni Nayar's family trust, her husband Sanjay Nayar's family trust and trusts belonging to her son, daughter and her mother, Rashmi Mehta.

On the National Stock Exchange (NSE), the beauty and fashion e-retailer's shares settled at Rs 2,208 per share on closure, up from Rs 2,018. It's a 79 per cent premium to the issue price of Rs 1,225 per share. On the Bombay Stock Exchange (BSE), Nykaa's stock witnessed a rally of 96.1 per cent at Rs 2,206 per piece.

Falguni Nayar, who started Nykaa in 2012 after a chequered career as an investment banker, has now the rarest distinction of being India's richest self-made billionaire. She has now entered the India Bloomberg Billionaires Index, an honour shared by only six other women so far. Post the IPO, Nayar's family trust still holds 22.04 per cent stake in Nykaa, while her husband's trust held 23.37 per cent stake in the company pre-IPO but sold 4.8 million shares out of the total 110 million shares he held before.

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Other major shareholder who diluted their stake in the company during the IPO was the billionaire entrepreneur Harindarpal Singh Banga and his wife Indra Banga. The duo had jointly owned 8.7 per cent stake in Nykaa pre-IPO. TPG Growth and Lighthouse India were the other notables who sold their stake during the course of the IPO process, as per Nykaa's Red Herring Prospectus.

The company had earlier increased its primary issue size by 10 per cent, aggregating to Rs 630 crore, whereas the offer for sale was Rs 4,700 crore.

FSN E-commerce, the parent entity of the Nykaa, has said that it proposes to pour the net proceeds earned through the IPO into the company's fashion and retail stores and to use it to fortify its warehouses. A percentage of the proceeds would also go into debt repayment and customer acquisitions and marketing.

Unlike many of its industry peers, Nayar's company turned cash flow positive during FY21 with the COVID-19 pandemic giving a major fillip to the fortune of the company. Nykaa reported Rs 61.9 crore Profit After Tax (PAT) in FY21, compared to the losses worth Rs 16 crore in FY20 and Rs 24.5 crore in FY19. Revenue from the operations grew by 38 per cent at Rs 2,440 crore for FY21 compared to Rs 1,767 crore a year ago.

In FY21, Nykaa's order book witnessed a massive surge, with over 19.5 million orders being placed, on an average, on its platform. Its fashion vertical saw a growth of almost 2x, year-on-year. According to a report from the research consulting firm RedSeer, Nykaa commands one of the highest average order values on e-commerce platforms, worth Rs 1,963 for beauty and personal care and Rs 2,739 for its fashion segment.

Also Read: Nykaa and Falguni Nayar deserve the applause, and so much more

Published on: Nov 10, 2021, 7:54 PM IST
Posted by: Vinay Rai, Nov 10, 2021, 7:45 PM IST