Nykaa founder Falguni Nayar now India's wealthiest self-made woman billionaire
Indian beauty start-up Nykaa's shares made a strong debut on the Indian stock exchanges on Wednesday following an IPO. The stock traded at a premium of 82% on the NSE over its IPO issue price of Rs. 1,125 per share. The stock's stellar performance has catapulted founder Falguni Nayar into the league of billionaires with a net worth of around $6.5 billion.
Why does it matter?
Nykaa's stock sold out on the first day it was offered to the masses, priced at Rs. 1,125 per share. Now, it is trading at around Rs. 2,054 per share on the NSE and Rs. 2,063 on the BSE. What does it mean for Nayar? Well, she founded Nykaa in 2012 months before she turned 50 and now owns around half the company.
Company has a market cap of Rs. 1 lakh crore
FSN E-Commerce Ventures is Nykaa's parent company and holds the distinction of being the first woman-led unicorn to go public. The IPO raised Rs. 5,350 crore for the firm and its market cap exceeds Rs. 1 lakh crore. The now-billionaire behind this moonshot start-up previously served with Kotak Mahindra for 18 years and quit as its Managing Director.
For Nayar, age is just a number
Nayar founded Nykaa when a typical Indian consumer purchased cosmetics from mom-and-pop stores. She capitalized on the scope of taking the beauty and skincare product business online and created Nykaa that operates online and through 70+ brick-and-mortar stores. Her multi-brand store has also helped bring luxury international brands to Indian shores so customers have a wider spread to choose from.
Nykaa is profitable, a rare feat for start-ups going public
Nayar is an alumna of the Indian Institute of Management, Ahmedabad, and a proud mother of twins Anchit Nayar and Adwaita Nayar. The twins are Ivy League-educated and run different Nykaa units. They are also among the company's promoters. At the helm of Nykaa, she has ensured the company clocks profits, a rare feat for internet start-ups going public this year.
Nayar says Indians are starting to open up to cosmetics
Nayar owns her stake in Nykaa through two family trusts and seven promoter entities. Nykaa is backed by Indian celebrities—including Alia Bhatt and Katrina Kaif—and VC firms Lighthouse Funds and TPG Growth, among others. Nykaa's subscriptions closed today while brokers recommend the share for the long-term. Ahead of the IPO, she told Bloomberg Indians are just beginning to splurge on makeup and grooming products.
Nykaa posted net profit of Rs. 61 crore in FY21
Nykaa has accrued 55+ million mobile app downloads across platforms as of August 31. It posted a consolidated net profit of Rs. 61 crore for the year ended March 31, 2021. Its IPO offers freshly issued equity shares aggregating to Rs. 630 crore and an offer for sale of 4.19 crore equity shares by existing shareholders and promoters.
Company will use funds to expand retail footprint
Nykaa revealed that it will use funds raised by the IPO to expand, set up new retail stores, and establish more warehouses. The company is also mulling over retiring a part of its debt, consequently bringing down interest costs and improving profitability in the near future. The IPO has recorded immense interest from institutional investors and individual traders alike, so far.
