Nykaa files IPO papers with Sebi

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After Zomato, the next unicorn is all set to go public. E-commerce platform for beauty products, Nykaa has filed has filed preliminary documents, the draft red herring prospectus (DRHP) with capital market regulator SEBI to launch its IPO.

IPO details

According to the DRHP, the company plans to Rs 525 crore via fresh equity. Promoters and investors will be selling upto 4.3 crore shares via offer for sale. Although, the DRHP did not mention the total size of the IPO, some media reports have suggested  the company is planning to raise Rs 4,000 crore and is seeking a valuation between Rs 35,000 crore – Rs 40,000 crore.

The entity that operates Nykaa, FSN E-Commerce Ventures Ltd, had on July 16, changed its status from a private company to public following which, Nykaa has now filed the DRHP.

About the company

While promoter Sanjay Nayar Family Trust will sell 48 lakh shares through an offer for sale, other investors who have proposed to sell a portion of their shares include TPG, Light House India Fund, JM Financials, Yogesh Agencies, Sunil Kant Munjal, Harindarpal Singh Banga, Narotam Sekhsaria and Mala Gaonkar among others.

Falguni Nayar, the founder, and her family will continue to own majority stake in the multi-brand beauty and personal care platform even after the IPO.

Nykaa’s offline channel comprises 73 physical stores across 38 cities in India over three different store formats as of March 31, 2021.

Objective 

The company has stated that it intends to use the funds raised via fresh equity sale to make investments its subsidiaries, namely, FSN Brands and / or Nykaa Fashion for funding the set-up of new retail stores; for capital expenditure of Nykaa E-Retail, Nykaa Fashion and FSN Brands for funding the set-up of new warehouses; repayment or prepayment, in full or in part, of certain borrowings availed by the company for expenditure to enhance the visibility and awareness of our brands; and general corporate purposes.

Kotak Mahindra Capital, ICICI Securities, Citibank, BofA Securities, Morgan Stanley and JM Financial have been appointed to manage its public issue.

Financials

According to the DRHP, Nykaa’s revenue from operations in FY21 was Rs 24,40.89 crore, which grew 38.10% from FY20. Its restated profit for the year in FY21 was Rs 61.94 crore, as compared to a restated loss of Rs 16.34 crore for FY20. It reported EBITDA of Rs 1,614.26 million and an EBITDA margin of 6.61% in the Financial Year 2021.

As of March 31, 2021, Nykaa had a cumulative downloads of 43.7 million across all its mobile applications, said the DRHP and during the Financial Year 2021, 86.7% of its online GMV came through mobile applications.