Nykaa, the nine-year-old fashion and beauty e-commerce platform, is gearing up for its initial public offering (IPO) with the filing of a draft red herring prospectus (DRHP).
IPO Details
Founded by 55-year-old Falguni Nayyar, Nykaa has not disclosed the size of the IPO publicly. However, reports suggest that the company aims to raise ₹4,000 crore through this issue. The IPO will include a fresh issue of equity shares worth ₹525 crore, along with existing investors selling part of their stakes amounting to 4.3 crore equity shares. Nykaa’s last reported valuation was $1.2 billion.
Utilization of Funds
Nykaa intends to utilize the net proceeds for several purposes, including setting up new retail stores and repaying existing loans. Over the next three financial years, the company plans to establish new retail outlets with a built-up area of approximately 75,000 square feet. As of March 31, 2021, Nykaa operated over 73 physical stores and 18 warehouses.
Repayment of Loans
The company has outstanding loans totaling ₹187.4 crore from HDFC Bank, Kotak Mahindra Bank, Axis Bank, and IDFC First Bank. A portion of the IPO proceeds will be allocated towards repaying these loans.
Investor Participation
Seventeen investors, comprising both institutional and individual investors, will divest a portion of their shareholdings through Nykaa’s public issue.
Lead Managers
Kotak Investment Banking, Morgan Stanley, Bank of America Securities (BofA), Citigroup Global Markets India, ICICI Securities, and JM Financial are the lead book running managers for the IPO. Link Intime will serve as the registrar of the offer.
As Nykaa ventures into the public markets, its IPO plans reflect a strategic approach to expansion and financial management, positioning the company for further growth in the competitive fashion and beauty e-commerce sector.
Clara Cardoso
Mariana Oliveira
