Nykaa Files Draft Papers for IPO with SEBI
Nykaa Files Draft Papers for IPO with SEBI

Nykaa has filed its Draft Red Herring Prospectus (DRHP) with market regulator SEBI. The company has a diverse portfolio of beauty, personnel care, and fashion products, including its owned manufactured brand products, under its two business verticals, Nykaa and Nykaa Fashion.

The initial public offer comprises a fresh issue of equity shares aggregating up to Rs 5,250 million, and an offer for sale of up to 43,111,670 equity shares being offered by the selling shareholders. The offer will also include a reservation of equity shares for purchase by eligible employees. The key selling shareholders include some of the private equity investors like TPG Growth and Lighthouse Funds and some individual shareholders. However, most of the investors are not cashing out fully and will continue to retain some stake in the company post-IPO

The company is the largest specialty beauty and personal care platform in India in terms of the value of products sold in FY21, and one of the fastest-growing fashion platforms in India based on growth in GMV from FY20 to FY21. The company clocked nearly 57 percent CAGR in GMV from FY19-FY21, and more than 48 percent CAGR in revenue terms from FY19-FY21.

Nykaa has reported a net profit of Rs 619.45 million in the financial year 2021. The company has also been EBITDA positive consistently over the last 3 years.

The IPO is likely to value the company at around $5.0 bn-$5.5 bn.

Nykaa plans to use the proceeds from the IPO for expansion, by setting up new retail stores and establishing new warehouses. It also plans to retire some of its debt, which should bring down interest costs, and further shore up its profitability. The company is also planning to deploy the proceeds of the IPO for marketing and promotional activities, to focus on strengthening its 13 owned brands such as Nykaa Cosmetics, Nykaa Naturals, and Kay Beauty along with establishing and promoting new brands.

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