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Indian Beauty Startup Nykaa Shimmers to Near $13 Bln Valuation in Debut

Indian Beauty Startup Nykaa Shimmers to Near $13 Bln Valuation in Debut

Wednesday, 10 November, 2021 - 08:00
A Nykaa private label kiosk at the Mall of Travancore in Thiruvananthapuram, Kerala. (Nykaa)

Indian cosmetics-to-fashion platform Nykaa made a blockbuster opening on Wednesday, fetching the company a near $13 billion valuation, in the latest startup listing after a stellar debut by food delivery firm Zomato.

Shares of FSN E-Commerce Ventures, the company that owns the Nykaa brand, soared as much as 98.7% to 2,235 rupees after debuting at 2,018 rupees in pre-open trade.

The debut price was at a 79.4% premium to the initial public offering (IPO) price of 1,125 rupees, valuing the company at 954.37 billion rupees ($12.86 billion) in an offering that was oversubscribed nearly 82 times last week.

Founded in 2012 by former investment banker Falguni Nayar, Nykaa became popular by selling cosmetics and grooming products from domestic as well as international brands, before expanding into fashion, pet care and household supplies.

“Nykaa is one of the very few profitable new-age companies and the first women-led unicorn that has also attracted lot of investor interest ... (Its) key strengths lie in its inventory-led business model for the beauty and personal care segment,” said Sneha Poddar, assistant vice-president, retail research at Motilal Oswal Financial Services.

The startup, whose investors include private-equity firm TPG, Fidelity and Indian celebrities Alia Bhatt and Katrina Kaif, runs its online operations through mobile applications and websites along with 80 brick-and-mortar stores across the country, as of Aug. 31.

“Nykaa has a seen a strong listing due to positive market sentiment ... however, the startup’s valuations look expensive at these levels despite factoring in strong long-term growth prospects, said Ajit Mishra, vice-president, research, Religare Broking.

Several other Indian high-profile startups have filed or are planning to file for IPOs, including Ant Group-backed fintech firm Paytm, and SoftBank-backed companies hotel aggregator Oyo, ride-hailing firm Ola and logistics provider Delhivery.

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