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Nykaa seeks up to $7bn in IPO valuation
Photo Credit: VCCircle

FSN E-Commerce Ventures Ltd, which owns the beauty start-up Nykaa, is seeking a valuation of up to Rs 52574 crore ($7 billion) at the upper end of the price band for its upcoming initial public offering. 

The firm has fixed its initial public offering (IPO) price at Rs 1085-1125 a share. Earlier, the firm said its issue will open on 28 October for subscription and close on 1 November.

The firm had also increased its fresh issue to ₹630 crore from ₹525 crore earlier. The offer for sale (OFS) has reduced to 41.97 million shares from 43.11 million shares. The firm plans to list on 11 November.

At the upper end price band, the firm will raise around Rs 5352 crore.  

The offer for sale comprises up to 4.8 million shares by Sanjay Nayar Family Trust, up to 5.42 million shares by TPG Growth IV SF Pte, up to 4.84 million shares by Lighthouse India Fund III, up to 2.54 million shares by Yogesh Agencies & Investment, up to 9.14 lakh shares by JM Financial and Investment Consultancy Services, up to 7.05 million shares by Sunil Kant Munjal, up to 10.20 million shares by Harindarpal Singh Banga jointly with Indra Banga, up to 2.34 million shares by Narotam Sekhsaria.

Currently, Falguni Nayar Family Trust and Sanjay Nayar Family Trust hold 22.33% and 23.67% stake, respectively, in the firm. TPG Growth has 3.48% while Lighthouse India Fund II 3.11%. Sinil Kant Munjal has 4.53% stake while Harindarpal Singh Banga jointly with Indra Banga has 8.7% stake in the firm.

Kotak Mahindra Capital, Morgan Stanley India, Bofa Securities, Citigroup Global Markets India, ICICI Securities, and JM Financial are the book running lead managers to the issue.

Nykaa will allocate ₹42 crore from the issue to investment in its arms FSN Brands or Nykaa Fashions for funding the establishment of new retail stores. Another ₹42 crore and ₹156 crore will be used for capital expenditure and repayment of debt. Nykaa will also use ₹234 crore to enhance the visibility and awareness of its brands.

Nykaa was founded in 2012 by investment banker Falguni Nayar and is a leading player in the online beauty aggregator segment. The firm is a digitally native consumer technology platform, delivering a content-led, lifestyle retail experience to consumers. It has a diverse portfolio of beauty, personal care, and fashion products, including brand products manufactured by it.

As of March 2021, the company had cumulative downloads of 43.7 million across all mobile applications and 86.7% of its online gross merchandise value came through its mobile applications.

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