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Nykaa - Making India’s beauty, their passion!

Updated: Jan 13, 2022

Nykaa has lately become a household name across the country as a result of its initial public offering (IPO) and the overwhelming reaction it got, propelling its creator Falguni Nayar into India's exclusive circle of self-made billionaire women. The founder of Nykaa, who owns approximately half of Nykaa, is now worth around $6.5 billion after the company's stock soared as high as 89 percent in early trade on Wednesday, 3rd November 2021.

Falguni Nayar, the former managing director of Kotak Mahindra Capital Company, created in 2012. Nykaa has grown in popularity in the eCommerce and retail industries since then. Nykaa has expanded by roughly 350 percent from last year to this year, and they expect to increase by another 300 percent this year. They are now operating at a 600 crore run rate and have set highly aggressive objectives that they are confident of achieving. Falguni Nayar's beauty business, or let’s say the business of selling unmatched quality of self-care products, competing with top e-commerce sites who have been in the business for way too long, has catapulted her into the top 1% of the world's wealthiest people!

Nykaa's inventory methodology is essentially what distinguishes it from its competitors. The items are obtained through brands and distributors and then sold directly to customers under this arrangement. This is in contrast to a marketplace approach, in which third-party vendors offer the items. Nykaa will be able to keep a tighter grip on its products as a result of this, reducing the chances of forged things making their way onto the platform. According to the Bloomberg Billionaires Index, the same woman, with the constant support of her staff, has become India's wealthiest self-made female billionaire. While explaining all the vents that have led her to accomplish this high, she recalls her family. "My father treated my brother and me equally and pushed me to go for the stars and follow my ambitions," she recalls. Growing up in a commercial setting was beneficial to her since it educated her about the ins and outs of commerce, such as investing, stock market, and insurance. "I could read balance sheets and insurance statements from an early age."

Nykaa's parent company, N E-Commerce Ventures, is India's first woman-led unicorn to list on the stock market. It raised Rs 53.5 billion ($722 million) in its first public offering, which was priced at the high end of a marketing range. As of 10:36 a.m. in Mumbai, the stock was up 78 percent.

Nayar started Nykaa in 2012, after the leading-lady of the Indian business world decided to call it quits at her old job, only months before turning 50, after leading a renowned Indian investment bank. Before the existence of Nykaa came into being, there was no one strong e-commerce platform attached to the forte of cosmetics/ self-care and most Indian women used to buy cosmetics and hair care products from local mom-and-pop shops, where the range was limited and trials were unheard of, or from platforms like Amazon or Flipkart, which did not offer as much of variety as now does Nykaa.

Since its initiation, the company has expanded to become the country's largest cosmetics retailer, bolstering online sales with demo videos from leading ladies of Bollywood and celebrities, from more than 70 physical locations.

The inventory system of Nykaa is mainly what sets it apart from its competitors. Under this structure, the products are purchased through brands and wholesalers and then sold straight to customers. This is in contrast to a marketplace model, in which things are sold by third-party sellers. As a consequence, Nykaa will be able to retain a tighter grasp on its products, lowering the likelihood of forged items making their way into the marketplace.

Nykaa is a profitable firm, which is unusual among online startups making their public debut due to the constraints of interaction, and the lack of B2C interaction, generally leaving a lingering sensation of distrust among consumers. However, with Nykaa this problem was overcome due to its user-friendly review and rating systems along with an active customer support staff.

Two family trusts and seven additional promoter entities own Nayar's corporate share. Among the promoters are her Ivy League-educated daughter and son, who oversee separate Nykaa units. Nykaa's IPO is one of numerous consumer Internet firms that have gone public this year, despite the stock market's recent upswing. Its operator, One97 Communications Ltd., is seeking for a $2.5 billion IPO, the country's largest. Nykaa's parent firm, FSN E-Commerce Ventures Ltd, said on October 27th 2021 that it had raised roughly Rs 2,396 crore from anchor investors prior to its IPO. Fidelity Management & Research Company has previously invested an unknown sum in the platform in late November 2020. In early April of 2020, the platform received a new $13 million fundraising round from previous investor Steadview Capital, cementing its status as a unicorn. Steadview Capital, TPG Growth, and Lighthouse Funds are among the platform's top investors. Considering the aforementioned points, it can be said that the platform has a lot of potential to grow and attain a more dominating position in the future.

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