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Nykaa Files DRHP with SEBI to raise Rs. 525 Crores

22 September 20225 mins read by Angel One
Nykaa Files DRHP with SEBI to raise Rs. 525 Crores
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Nykaa, an e-commerce start-up, has filed preliminary papers with the Securities and Exchange Board of India to raise Rs. 4000 crores via an initial public offering.

Per its DRHP, the IPO will comprise new shares worth Rs. 525 crores along with a secondary issue of 43.11 million equity shares by existing shareholders and promoters.

TPG Growth IV, Lighthouse India Fund III, JM Financial, and Investment Consultancy are some of the investors who will be offloading their shares via an offer for sale (OFS).

What’s Cooking with the Nykaa IPO?

The Mumbai-based beauty product aggregator aims to fulfil the following objectives by way of this initial share sale:

  • Invest in Nykaa Fashions to open new retail stores
  • Meet capital expenditure requirements
  • Repay outstanding borrowings
  • Grow its operations in a market that is attracting a lot of interest from investors right now
  • Fulfil general corporate purposes

Besides these, Nykaa will be leveraging its public issue to boost brand awareness.

So, now that you’re all up-to-date on the Nykaa IPO, let’s take a closer look into the company.

Competitive Strengths of Nykaa

The company stands out among its peers for the following reasons:

  • This company has over 75 physical stores all over India
  • Nykaa has a stellar balance sheet, hinting at ample scope to expand its operations.
  • This company has an efficient inventory management system. It operates on an inventory model, helping it determine the optimum level of stock.
  • Another key strength of Nykaa is its strong social media presence. This company runs online marketing campaigns regularly. This move has been instrumental in increasing sales and acquiring new customers.
  • Nykaa entered the list of unicorn companies after raising funds worth roughly Rs. 167 crores in 2020.
  • In 2021, the company acquired Pipa Bella, an online jewellery company.
  • Nykaa’s product portfolio is quite diverse, which has helped it expand its customer base. Currently, this company has roughly 15 million users.

Financial Highlights of Nykaa

The following table highlights the company’s revenue between 2016 – 17 and 2019 – 20.

Financial Year Revenue (in Rs.)
2016 – 17 2.14 billion
2017 – 18 5.1 billion
2018 – 19 12 billion
2019 – 20 18.6 billion

Apart from revenue, investors must take these figures into account:

  • Nykaa’s net profit for FY2019 was Rs. 2.31 crores, and in the same fiscal, its valuation stood at $743 million.
  • In FY21, the company reported a net profit of approximately Rs. 61.95 crores against a loss of Rs. 16.34 crores in the previous financial year.
  • For FY2020, Nykaa reported an EBITDA of Rs. 94 crores.

Summing Up

Considering Nykaa’s impressive balance sheet, it appears that the company has tremendous potential to grow in the long term. Furthermore, with Nykaa constantly updating its product portfolio, the company is well-positioned to tackle the various challenges that may arise due to the economic environment.

But, investors must consider other aspects like weaknesses, threats, and competition besides its strengths and opportunities. Individuals can find such details here.


Frequently Asked Questions

  1. Who are the merchant bankers for the Nykaa IPO?

The merchant bankers for Nykaa IPO are Morgan Stanley India, Kotak Mahindra Capital, ICICI Securities, Citigroup Global Markets India, JM Financial, and BofA Securities.

  1. Who is the registrar for Nykaa’s initial public offering?

Link Intime India Pvt Ltd is the registrar for Nykaa IPO.

  1. How will investors receive Nykaa shares after allotment?

Nykaa shares will be credited to the DEMAT account of eligible investors post-completion of the allotment status.

  1. How can investors check the share allotment status of Nykaa IPO?

Investors can check the allotment status via Angel One’s online platform or BSE’s online portal.

  1. How can one apply for Nykaa IPO?

Individuals can subscribe to Nykaa’s upcoming public issue by opening a DEMAT account with Angel One. Existing customers can apply for this IPO without any hassle by logging in to their online trading account.

  1. What is the listing date of this IPO?

The issuer hasn’t announced the listing date yet.

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