Beauty retailer Nykaa is looking 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 is because the multi-brand e-commerce fashion platform has gained from a significant shift towards online sales during the COVID-19 pandemic.
Founded by former investment banker Falguni Nayar, Nykaa will keep unaltered the size of the IPO at between $500-$700 million, sources in the know told Livemint, adding that the rise in the beauty retailing startup's overall valuation is guided by a surge in its revenue and profit, principally due to COVID-related disruptions, which has driven more customers to buy online.
"The road shows are on for the IPO (initial public offer), and FSN Ecommerce Ventures Pvt. Ltd, the holding company of Nykaa, will file its draft red herring prospectus by this June-end or early July, and the IPO should take off in the March quarter of this fiscal," a source said.
"The public offer will be coupled with an offer for sale to provide an exit to existing investors. The price band is yet to be decided, but a 10-20% stake of the firm could be offered to the public for an adequate free-float," the source added.
The beauty retailer has designated Morgan Stanley and Kotak Mahindra Capital Co. as managers for its public offering. Although other big unicorn startups, or the ones with a valuation of over $1 billion, are also planning to go public, Nykaa is the only startup that is profitable and will fit the criteria to list on the main board of Indian stock exchanges, according to the report.
Founded in 2012, Nykaa is India's largest omnichannel marketplace for women with approx. 15 million registered users. The beauty retailer caters to 1.5 million orders a month.