Founded in 2012 by former investment banker Falguni Nayar, Nykaa has grown into India’s top e-commerce site for beauty products, with strategic endorsements from Bollywood stars and support among twenty-somethings. The company now offers more than 2,500 beauty brands, from makeup to skincare products, fragrances and other personal care products, through its websites, apps and some 80 brick-and-mortar stores.
"I hope the Nykaa journey — an Indian-born, Indian-owned and Indian-managed dream-come-true — can inspire each of you," Nayar said at the listing ceremony on Wednesday.
Nykaa (the Sanskrit word for actress) quickly became popular with young tech-savvy Indians — predominantly women — who preferred the wide selection of brands compared with what was on offer at their local shops.
"The best part about Nykaa is that it lets me access so many global brands that had never been sold in India before," 30-year-old loyal customer Sanaeya told AFP. "They have everything from major luxury brands to smaller niche ones and even lesser-known Korean skin care products. I always find something new there.”
Nayar, 58, joined only six other Indian women dollar billionaires as Nykaa’s parent company FSN floated on the Mumbai stock exchange, hitting a valuation of 1 trillion rupees ($13.5 billion) in the first five minutes of trade. The company has said the IPO proceeds will be used for a range of strategical corporate purposes, including investing in FSN Brands or setting up new retail stores.
Endorsements from social media influencers and celebrities
Bollywood actress Katrina Kaif has invested in the firm — helped cement Nykaa’s popularity as it battles giants such as Amazon and Flipkart.
Nykaa has also manufactured its own in-house brand of products since 2015 and recently began selling clothes and household products. It has a growing high street presence with 80 stores across 40 Indian cities. The retailer expects India’s beauty and personal care market to nearly double in size from 2020 to 2025, reaching nearly 2 trillion rupees.
Even after selling 4.8 million shares via the IPO, Nayar — along with her husband and twin children — continues to own more than half of the company, valuing her stake at $7 billion.
A profitable jewel
Nykaa’s three-day IPO was over-subscribed by nearly 82 times, signalling strong investor demand for a start-up that has already achieved profitability.
Technology start-ups in India have attracted record investment this year, with more than 33 "unicorns" — companies valued at more than $1 billion — created, benefiting from investors spooked by a crackdown on technology giants in China.
Others going public this year include food delivery giant Zomato, whose shares have since risen 80 percent, and mobile payments pioneer Paytm which is conducting its IPO — India’s biggest — this week. But unlike many of its loss-making peers, Nykaa is profitable.
