Fidelity bets on Nykaa via secondary deal; early investors part-exit
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US-based asset management firm Fidelity Management & Research Company, LLC has come as a new investor in beauty and lifestyle omnichannel company Nykaa.

Nykaa said that Fidelity bought shares from early investors and employees, without sharing details on the sellers or the quantum of investment.

Some early investors in the firm include names like Smita Parekh, wife of HDFC Ltd chairman Deepak Parekh; ace corporate lawyer Zia Mody of AZB; and Hong Kong-based billionaire Harindarpal Banga of Caravel Group.

Others include ACC Ltd chairman Narotam Sekhsaria; JM Financial's Nimesh Kampani; Mariwala family of Marico; and veteran PE dealmaker Dalip Pathak. TVS Capital was one of the first institutional PE-VC funds to invest in FSN E-Commerce Ventures Pvt Ltd, operator of Nykaa.

For a detailed picture on who is sitting on how much profit, click here.

Given that the firm commanded a valuation of around Rs 9,000 crore early this year, even a 1% stake picked up by Fidelity would be upwards of Rs 90 crore. Given the growth in the company, it would have commanded a premium from the new investor.

Nykaa said it clocked revenues of Rs 1,860 crore for the year ended March 2020 with operating profit of Rs 94 crore. This means the firm saw almost 50% jump in revenues and ten-fold hike in operating profit last year. Nykaa added that it is poised to grow 40% in the current fiscal ending March 2021.

This development comes after it raised Rs 19.6 crore from Sunil Kant Munjal, one of the founder-promoters of the Hero Group, in June. Munjal had first invested in Nykaa in 2016 when he had led a $12 million funding round in the company.

Prior to that, in March, Nykaa raised Rs 166 crore from Steadview Capital, which the company says led to a valuation of $1.2 billion.

Nykaa was set up in 2012 by investment banker-turned-entrepreneur Falguni Nayar, who was a managing director at Kotak Mahindra Capital. Its online marketplace sells products across categories ranging from skincare, hair care, fragrances, bath and body, and luxury products for both women and men.

Other investors in the firm include Lighthouse and TPG. TPG had invested Rs 100 crore in Nykaa in April last year.

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