Veteran investment banker-turned-entrepreneur Falguni Nayar became the richest self-made woman in India after the stellar debut of cosmetics and fashion retailer Nykaa’s parent FSN E-Commerce Ventures on Wednesday. The listing price of 2,018 rupees, which is a whopping 79% premium to the issue price of 1,125 rupees, gives the company a valuation of $13 billion. Nayar’s 52.6% stake held with her husband Sanjay Nayar, who heads American private equity firm KKR’s India unit, and their twins, is worth $6.8 billion
Nayar, 58, who is the founder, managing director and CEO of Nykaa, was dressed in a resplendent red sari at today’s listing ceremony at the National Stock Exchange in Mumbai. She became a billionaire in a pre-IPO private placement in June that valued Nykaa at $2.3 billion, giving her a net worth of $1.1 billion. The listing boost has made her the richest self-made woman in India, a title held until now by biotech entrepreneur Kiran Mazumdar Shaw whose current net worth is $3.6 billion
The Nykaa IPO, which opened on October 28 and closed on November 1, was over-subscribed 82 times with the portion for qualified institutional buyers subscribed at 92.3 times; non-institutional investors at 110 times; the retail portion at 10.3 times and the employees’ segment at nearly 1.9 times. The Mumbai company had set a price band of between 1,085 and 1,125 rupees per share.
The multi-brand retailer of cosmetics and apparel made a fresh issue of 5.6 million shares in addition to shares being sold by a range of early investors. These include Hong Kong commodities billionaire Harry Banga; Rishab Mariwala son of Indian consumer goods billionaire Harsh Mariwala and Sunil Kant Munjal, brother of auto billionaire Pawan Munjal. The proceeds will be used for adding new stores and warehouses and for enhancing brand visibility.
“Nykaa’s listing on the Indian stock exchanges today has been a historic landmark and what makes it so awe-inspiring is that they are just getting started,” says Angad Banga, son of Harry Banga, whose Hong Kong-based family office was one of the earliest investors and continues to hold a minority stake in Nykaa. “The unprecedented level of investor interest we’ve seen is a genuine reflection of the passion and determination of the founder, the highly competent and efficacious leadership team driving the company; and the tremendous vision they have for the future.”
Nykaa, which offers more than 4,000 brands across its beauty, personal care and fashion platforms, has 80 stores across 40 cities. But 97% of its gross merchandise value (GMV) is from online sales with a 63% contribution from tier 2 and tier 3 cities. About 70% of the GMV is from existing customers. It works with more than 3,000 influencers including Gen Z trend setters, lifestyle bloggers and celebrities.
Nykaa is a rare example of a startup already turning a profit. It has been Ebitda positive for the last three years and became profitable in fiscal 2021. Nykaa’s revenue rose to $334 million for the fiscal year ended March 2021 from $236 million in the previous fiscal year. The company reported a net profit of $8 million in that same period versus a net loss of $2 million in fiscal 2020.
For the three months ended June 30, 2021, Nykaa’s revenue was nearly 8.2 billion rupees ($110 million) with net profit of 35.2 million rupees ($474,000).
Nayar, who had stated in a 2019 interview with Forbes Asia, that she will take her company public only after it became profitable, was true to her word.
Her entrepreneurial journey started in 2012 when she quit her job as an investment banker after spending 19 years at Kotak Mahindra Bank, founded by billionaire Uday Kotak. She had set up Kotak’s securities operations in the U.S. and the U.K. in addition to spearheading scores of IPOs in India.
In 2012, she invested $2 million to start “Nykaa”—which is derived from the Sanskrit word “Nayaka,” meaning one who’s in the spotlight. Her aim was to bring an array of international beauty brands including the likes of Clinique and Bobbi Brown to Indian consumers. She soon expanded to brick-and-mortar stores with the first one opening in 2014. In 2015, she launched the company’s in-house Nykaa cosmetics brand and started hosting the Nykaa Femina Beauty Awards. By 2016, she had ushered in the first luxury brand Estee Lauder.
Nayar runs Nykaa with her twins—Adwaita who is the cofounder and CEO for the fashion business and Anchit who is the CEO for the beauty and e-commerce business. She also has plans of taking it overseas, first to the Middle East and then Europe.
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