TPG-backed Nykaa ups fresh equity offer in IPO to $84 mn

By Beena Parmar

  • 14 Oct 2021
Credit: Pixabay

Beauty and lifestyle omni-channel company Nykaa has revised its IPO draft red herring prospectus (DRHP) to increase the size of the fresh equity offer to Rs 630 crore ($83.7 million), a rise of Rs 105 crore ($14 million), according to industry sources. 

However, the number of shares for the offer for sale will remain the same at 43.11 million, the sources said. 

The Securities and Exchange Board of India (Sebi) is understood to have given the approval for the IPO and the firm is likely to make its debut on the stock exchange by the end of this month, they added.  

Sebi is likely to announce it next week. 

The development was first reported by Entrackr quoting regulatory filings. VCCircle could not immediately verify the filings. 

In August, Nykaa filed the draft papers for the IPO which comprised of fresh issue of shares up to Rs 525 crore and offer for sale (OFS) of up to 43.11 million shares by the shareholders. The IPO plan was first reported by VCCircle in April. 

While media reports estimate that Nykaa would raise around $500 million (approximately Rs 4,000 crore), it did not disclose the actual size of the IPO in its DRHP. The valuation is likely to be in the range of $4.5-5 billion (Rs 35,000- 40,000 crore). 

Nykaa, founded by investment-banker-turned entrepreneur Falguni Nayar, would utilise fresh proceeds to set up retail stores and warehouses, fund online operations and repay borrowers.  

Nykaa’s investors including TPG Growth will sell shares up to 5.42 million; and Lighthouse will offload shares up to 4.89 million. The company's promoter, Sanjay Nayar Family Trust, will sell shares up to 4.8 million.   

Falguni’s husband Sanjay Nayar is the chairman of private equity major KKR India. He is also additional non-executive director at Nykaa. 

Falguni and Sanjay Nayar and their family trusts hold 53% of the company along with several favourable rights. 

Founded in 2012, Nykaa does over 60,000 orders every day and claims to have over 15 million registered users. It has 73 physical stores across 38 cities in India over three different store formats at the end of FY21. 

Nykaa has been expanding its fashion business with a couple of acquisitions over the past two years. In 2019, it acquired women styling platform 20Dresses.com. 

This year in April, Nykaa had bought jewellery etailer Pipa Bella, a brand that targets 22-35-year-old urban women. Pipa Bella had secured funding from early-stage venture capital firm Fireside Ventures in 2018 and previously in 2015 it had secured $600,000 in a pre-Series A round led by LionRock Capital.