India's Nykaa trades up after $719m IPO

The company sold approximately 47.6 million shares – including 41.9 million shares held by existing investors – for INR1,124 apiece, according to a filing. TPG, which invested in Nykaa through its growth strategy and owned 3.48% pre-IPO, took INR6.1 billion off the table. Lighthouse held 3.14% and realized proceeds of INR5.5 billion.

The stock ended its opening day on November 10 up 96% at INR2,208. It has continued to rise since then, closing at INR2,329 on November 12, giving Nykaa a market capitalization of INR1.1 trillion.

It marks the continuation of a newfound affection for pre-profit companies on India’s stock exchanges. Online food services platform Zomato was the first to move, raising INR93.7 billion in July. Paytm is on course to top that with a INR183 billion IPO, while various others are waiting to list, from Oyo to PolicyBazaar to Delhivery.

Nykaa was established in 2012 by Falguni Nayar, a banker-turned-entrepreneur and wife of Sanjay Nayar, chairman of KKR’s India business. They provided all the early-stage funding.

AVCJ Research has records of Sharrp Ventures, Techpro Ventures and TVS Capital Funds participating in a $9 million round in 2015. Lighthouse led a INR1.13 billion round in 2018, while TPG played the same role in a $14.4 million deal a year later. Steadview Capital put in INR1.67 billion in 2020. Other investors include Max Ventures & Industries and Fidelity.

Nykaa describes itself as a lifestyle retail platform and a consumer brand. The company’s online presence comprises apps and websites, with 55.8 million cumulative app downloads as of August. Offline, it has 80 stores in 40 cities. About 3.1 million different product lines are available from 4,078 local and global brands across beauty, personal care, and fashion.

Gross merchandise value (GMV) for the 12 months ended March 2021 was INR40.5 billion, up 50.7% year-on-year. Over the same period, revenue rose 38.1% to INR24.4 billion, EBITDA increased 99% to INR1.61 billion, and a net loss of INR163.4 million became a net profit of INR619.5 million.

Beauty e-commerce has attracted substantial amounts of private equity funding in India. In November alone, Good Glamm Group – operator of MyGlamm – achieved unicorn status on closing a $150 million Series D, while Purplle received a $75 million Series E at a valuation of $630 million.

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• Topics
• South Asia
• Consumer
• Technology
• IPO
• India
• TMT
• Lighthouse Funds
• TPG Capital